Buying a Home and committing to a Mortgage can be very
scary! A home mortgage loan is the largest debt that most Americans will
take on in their lifetime. As such, making the decision to take out a
mortgage is not one that most first time homebuyers take lightly.
A home mortgage loan
can have a staggering, and sobering effect on the first time home
Not only will your monthly mortgage payments probably be the largest
bill that you face each month, but the total amount of debt realized
with a home mortgage loan can have a staggering, and sobering effect
on the first time home buyer.
I can remember the months leading up to my decision to fill out
a mortgage application. I had nightmares about loosing my job, not
being able to keep up with my payments and finding myself homeless.
And those were on the good nights when I was able to sleep at all!
Committing to a Home Mortgage Doesn't Have To Cost You Your sleep
Get the Best Rate on Your Home Mortgage Loan. Home mortgage interest
rates hit record lows in 2004 and have remained at record lows as
we go through 2005. It is possible today to get a thirty-year fixed
rate home mortgage loan for under five percent, and an adjustable
rate mortgage can be found for under four percent if you look hard
However, record low mortgage rates do not mean that you should take the
first mortgage offer made to you, even if it sounds low. On the contrary,
it means that shopping around for the best mortgage possible may be even
more beneficial then during a high market period.
To get the best possible home mortgage loan you will need to "shop"
and compare lenders.
If you solicit mortgage rate quotes from enough lenders and pay attention
to economic news, you might be able to secure a home mortgage loan at
an interest rate that you will not see offered again in your lifetime.
Solicit Several Mortgage Rate Quotes
In order to get the best deal on anything in America, it is important
to shop around. Securing a home mortgage loan is no exception to the
rule. If you are the type of consumer who likes to walk into the first
store that you see and buy what you need without comparing your options,
then you might also be inclined to accept the first home mortgage loan
offered to you
Doing so would be a big mistake. In order to get the best possible home
mortgage loan you will need to "shop" and compare lenders. Having a
substantial down payment on the home that you wish to purchase and applying
for a smaller home mortgage loan is another way to increase your chances
of getting mortgage approval. Again, this goes back to the risk involved
to the lender for financing your loan.
Many mortgage lenders will require that you have a 20% down payment
on the home, and then they will grant mortgage loan approval for the
remaining 80% of the purchase cost. This helps to offset the lender
risk. In the event that you are unable to keep up with monthly mortgage
payments and you default on the loan, the lender will have a better
chance of recovering his money through foreclosing on and selling the
home if the loan is a smaller percentage of the market value of the
Therefore, if you can save 30% or more towards a down payment on your
home, you will be lowering the risk to the lender and increasing your
chances of getting mortgage approval.
You May Have To Accept a Higher Interest Rate on Your Mortgage Loan
If you wish to secure a mortgage despite your bad credit history, and
you do not have a sizeable down payment saved up, you may have to agree
to a mortgage at a higher interest rate than that which is being offered
to low risk borrowers. This is because the lender will want to be compensated
for his increased risk level.
This should not necessarily prevent you from taking the loan, though.
If you secure the mortgage and are diligent about making timely payments,
after paying on it for awhile you will improve your credit history.
Then you can refinance the mortgage at a later date with a better rate