With home ownership in the United States now approaching 70% of all households, the chances are good that you've either taken out a mortgage in the past or have one now. However, many homebuyers don't research and act as carefully as one might imagine given the amount of money borrowed and the huge difference even a few basis points (one one-hundredth of a percentage point) can make over a lengthy loan.
Instead, homebuyers often search for the home they want, then apply for a mortgage and hope for the best. A far better approach is to find out how much mortgage you can qualify for, then look at homes you know are in your price range. Known as "prequalification," having this piece of paper in your hand can also set you apart as a serious, committed buyer in hot real estate markets where properties are fetching multiple offers.
You may be able to lock in a mortgage rate when you pre-qualify, so you know exactly how much you'll spend each month. If possible, ask the lender to agree, in writing, to lower your rate if rates go down before
- HSH Associates tracks mortgage rates nationwide and will sell you a printout of lenders and rates in your area.
- Zillow will give you information on property prices and sales figures in your area.
- Bankrate provides information on the prevailing rates of different types of mortgages as well as a list of local lenders and their current rates.
Alternative Sources of Mortgage Loans
There are also several programs that offer help for those home-buyers whose income level is less than what is usually required to qualify for a mortgage. They include the following:
- FNMA and Farmer's Home Administration
- U.S. Department of Housing and Urban Development (HUD)
- Many states provide low interest and low down payment mortgages for first-time buyers if they meet state guidelines. Find your state government
- VA (Veteran's Administration) enables qualifying veterans to borrow with little or no down payment.
- FHA (Federal Housing Administration) mortgages let you borrow up to 95% of the price of a house if the price and closing costs are within their guidelines. Check with your lender or directly with FHA for more information.
Who Offers Mortgages?
Practically all financial service companies, including many brokerage firms, have entered the mortgage market. This would include banks and credit unions, developers, mortgage brokers, and mortgage companies or mortgage bankers. Shop around! You'll likely be pleasantly surprised at the wide range of loan types and terms you'll be offered.
If we at Kemp Harvest Financial Group can help you in any way with regard to your financial planning needs, please feel free to contact us.
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