Just the Peaks

This newsletter, at a glance

  •   For hopeful homeowners, the right advice can make or break their mortgage

 

  •   Mortgage rates vary greatly, ranging from a low of 3.31% to a high of 18.45%

 

  • Everest has a handful of helpful tips to help secure you a payment that work

You’re in the market for a mortgage—but where to start?
Here are 7 simple tips for scoring an attractive loan

As with all major financial decisions, getting a mortgage is a process filled with decisions. Before you even sit down with a loan officer, there are many boxes you can check off to ensure a smoother transaction. After all, securing a good rate and terms are crucial to your family’s future. The good news? You don’t have to make the decision alone.
 

 

A personal pledge

Before we dive into our 7 tips for application success, let’s take a look at some interesting facts and figures about home loans in America:

– For most families, their residence is the single biggest asset. It serves as the headquarters for life, as well as a potential source of equity for larger life events, like college, marrying off children, etc. As Warren Buffet says, his home was his “single greatest investment.”

– Mortgage rates are known to vary drastically over time. The lowest rate, clocked in late 2012, was 3.31% (for a 30-year fixed-rate mortgage), while the highest ever recorded was 18.45% for the same terms back in 1981.

– Having a solid credit score can land you sweet savings. If your FICO rating is among the highest (760-850), expect lower interest rates. But even if your score is in the low 600s, a good mortgage advisor can help.
   **For more interesting mortgage facts, visit The Motley Fool

If you think the time is right to make your move, start by polishing your appearance, so to speak. To get approved, your loan officer may advise you to prep your account for bank examination.

Applying for a mortgage doesn’t have to be stressful. Here are our top tips for preparing your finances for a home mortgage:
6 tips for securing a good mortgage

1. Clean up your credit report – As seen in the aforementioned example, a high credit rating almost always leads to better interest rates. Since saving money is priority uno, your loan officer will check your credit reports first, and inform you of any errors that need to be corrected.  You can start on your own by pulling your free annual reports from the three major credit bureaus. Check your profile for any inaccuracies or instances of fraud, and set out to fix any errors prior to applying for a mortgage.

2. Have a realistic payment in mind – Lenders calculate their numbers based on the likelihood that you could repay the debt. But can they truly predict your future financial habits? The fact is, only you can decide what the most practical maximum monthly payment is for you. Do your homework and have a conversation with your loan officer for guidance.

3. Choose your financing method – Don’t get blindsided by the many decisions you have to make when buying a home. When presenting your options, your loan officer can help you decide  which kind of loan rate rate is best for you: fixed or adjustable. While there are pros and cons for both, the choice really boils down to the level of security (or flexibility) you desire, as well as the length of time you need to pay back the loan.

4. Take the targeted approach – When beginning the loan procurement process, make sure the time is right: If you choose to shop around for quotes periodically over the course of a year, the resulting inquiries will actually hurt your overall credit score. However, if you submit multiple applications within a short amount of time, the reporting agencies only hit you once!

5. Save your cash – Today, you can get into a home with as little as 3.5% of the home’s cost out of pocket. If you can, though, shoot for a higher percentage in order to get your monthly payments down. A 20% down payment also helps you avoid private mortgage insurance (PMI) being tacked onto your bill.

6. Monitor the economy – With the right mortgage professional at your side, your chances are good. But in the unlikely event the bank’s offer is not what you hoped for, the choice is yours. Your loan officer wants a happy client; no one says you must sign now. If you have the time, wait until your finances and/or the economy are more fit, and score a better deal on your own terms!

Everest says: Dreams work best when you do too.