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How to Buy a Home and Start out with a Low Monthly Mortgage Payment

Buying a Home? 4 Steps You Can Take to Ensure You Start out with a Low Monthly Mortgage PaymentAre you thinking about buying a new house or condo? If so, you’ve likely given some thought to your mortgage and as to how you can pay as little as possible in order to own your new home.

Below we’ll share four easy steps that you can take to ensure you start out with an affordable monthly mortgage payment.

Need to get a free loan analysis from a local lender? Click HERE! 

Make A Large Down Payment On Your Home

The easiest way to reduce your monthly payment is to invest as much as possible in your down payment. The less you have to borrow, the less you’ll be required to pay back.

If you can put a sizeable amount down on your home you’ll find that your monthly payments are going to be very manageable. You’ll also save a lot of money in interest.

Maintain A High Credit Score

When a lender assesses your financial history they’ll take an in-depth look at your credit score in order to determine how much risk you present to them. If you’ve kept a clean credit rating and have a high score, it’s likely that you will qualify for a lower interest rate than someone with a lower credit score – even if you both have the same monthly income.

Buy A Smaller, More Efficient Home

When you’ve made your short list of homes and you’re scheduling your viewings, ask yourself – do you need a home this big, or this expensive? If you can do with a smaller, more efficient home you can reduce the amount of mortgage financing that you require and this will in turn reduce the amount that you need to pay each month.

Consider A Longer Mortgage Term

Finally, if you need to reduce your monthly payment at any cost you can stretch out your mortgage repayment period by a few years. Note that while this can reduce your payment amount it will actually increase the total amount that you end up paying back as you’ll pay more in interest.

While the above are general tips for reducing your mortgage payment, it’s likely that there are other strategies that are unique to your financial situation. Contact your local mortgage professional at your convenience and they’ll be able to share insights that are relevant to your income, your credit and the price range you’re looking to buy into.

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Shopping Around: How to Compare Mortgages from Different Lenders or Underwriters

Shopping Around: How to Compare Mortgages from Different Lenders or UnderwritersBuying a home is a major financial transaction, especially if you’re going to need mortgage financing to help cover the purchase cost.

The only way to know if you’re getting the best deal on a mortgage is to shop around, but with so many different lenders vying for your business it can be very tough to choose which mortgage is the best fit for your own situation.

In this post we’ll share how you can compare mortgages from different lenders or underwriters so that you can get the best possible deal on your mortgage loan.

Start By Comparing Interest Rates

The most important factor in your mortgage is the interest rate that you’ll be required to pay so this should be your starting point.

While most lenders will keep their rates competitive with one another, you may find that there are discounts available based on your credit or financial history. You might also find that some lenders are willing to adjust the rate based on how long of a mortgage term you’ll need, and how much you’re investing in your down payment.

Get An Estimate Of Your Total Closing Costs

While the number that you’re likely focused on is the total monthly payment that you’ll be making for the next few years, you’ll also want to find out how much in fees and closing costs you will have to pay in order to take out the mortgage.

Every lender charges different fees and the amounts can vary wildly, so be sure to get an estimate on these costs to find out how they’ll affect your home purchase.

Watch Out For Early Payment Penalties

Finally, you’ll want to keep an eye out for early repayment penalties as these can cause you a headache later on if you decide you want to pay your mortgage off a bit faster. The ideal mortgage is one that allows you to repay the principal amount at any time without facing a penalty, but depending on the other terms that you require you might need to shop around a bit before you find a mortgage like this.

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Turned Down for a Mortgage? What to Do

Turned Down for a Mortgage? What to Do if You are Declined - and How to Get Second OpinionIf you have been declined for a mortgage, you may think that buying that new home is out of reach. However, there are ways to turn a rejection into an approval and to find a more accessible loan. Here are just a few steps you can take to learn about your loan options and get the mortgage that works for you.

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Find Out Why The Mortgage Application Was Denied

The first step to getting a second opinion is to find out why your mortgage application was denied. Banks commonly deny mortgages for reasons like a low credit score, a high debt-to-income ratio, or concerns about the applicant’s past and present employment status.

To qualify for a mortgage, most lenders want to see someone with a credit score of 640, a debt-to-income ratio of less than 43 percent after the mortgage is included and at least 30 days in your current position if using wage income to qualify for the loan.

Not All Lenders View An Application The Same Way

A good reason why it is worthwhile to ask for a second opinion about your ability to get a loan is because no two lenders will view an application the same way. For one lender, a credit score of 650 is insufficient for getting a loan – but another lender might be more than happy to offer you a mortgage with a score of 650. To get a second opinion, you may wish to talk to a mortgage broker who will be able to scan a variety of loan programs to find one that works for you.

There Are Ways To Find Down Payment And Closing Cost Assistance

Those who have a low credit score or other questionable metrics may be able to qualify for a loan by offering a larger down payment. While a first-time buyer may not have the cash on hand to make a larger payment, there may be programs that provide grants or low-interest loans that can be used as part of your down payment or to help pay closing costs. With this extra money, it may be possible to overcome lender objections and obtain a mortgage.

If your mortgage application has been rejected, it doesn’t mean that you can’t get a mortgage from another lender. If you’re ready to buy a house but just need to clear the mortgage approval hurdle, there are ways to get a leg up.

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5 Tips for Managing Your Monthly Budget to Ensure Your Mortgage is Paid On-Time, Every Time

Five Tips for Managing Your Monthly Budget to Ensure Your Mortgage is Paid On-Time, Every TimeBudget for your Mortgage Tips and Tricks in St Tammany!

Homeowners who are struggling to make their monthly mortgage payments can make it easier on themselves by cutting costs in other areas. Learning how to budget effectively will likely enable homeowners to pay their mortgage payments on-time, every time. Here are five of the best budget tips:

Conserve Energy

It is advisable to be mindful of energy use in order to keep utility bills down to a minimum. Lights, televisions and other devices requiring electrical power are best to leave off in unoccupied rooms. It is also a good idea to make sure that windows and doors are properly sealed so that energy is not wasted.

Stay Committed to Couponing

All too often, coupons that arrive in newspapers or through emails are quickly discarded. Collecting coupons from various sources can give homeowners the chance to save big on groceries, entertainment and other everyday purchases. Some of the savviest consumers have been known to spend practically nothing on their purchases by simply staying committed to the art of couponing.

Watch Credit Card Usage

Having a credit card often creates a false sense of financial security. Many card holders are tempted to charge their credit cards up to their limits only to be burdened with high interest rates and inflated minimum payments. Credit cards are best to use only in times of emergencies.

Consider Alternative Transportation Methods

Fuel costs, auto repairs and other expenses associated with driving a vehicle on a frequent basis can make it much harder for homeowners to stay on top of their mortgage payments. People who have access to adequate public transportation may be able to significantly reduce their commute costs. Car sharing services give people the opportunity to use a car on an as-needed basis and often prove to be a smarter alternative to owning a vehicle.

Keep Expense Records

It can also be easier to set money aside for mortgage payments if expenses are carefully monitored with a detailed eye. It is best to closely scrutinize receipts, bank statements and other financial documents for any discrepancies. Keeping track of expenses on a spreadsheet so that all financial information is clearly displayed may be another practical idea.

Smart budgeting practices can help homeowners save the extra money they need to pay their monthly mortgage payments before each due date passes.

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Three Ways That Your Credit Score Affects Your Mortgage (and Your Chance of Obtaining One!)

Three Ways That Your Credit Score Affects Your Mortgage (and Your Chance of Obtaining One!)If you’re thinking of buying a home, you’ve probably been thinking a lot about your credit score as well. Credit scores control so much of what we do in the world of finances, but what does your credit score really have to do with your mortgage? Here are three ways that your credit score could impact your mortgage application.

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Your Credit Score Affects Your Ability To Get A Mortgage

The first thing your credit score tells a lender is whether they should lend to you at all. In some cases, if you have a very low credit score, you may not be able to obtain a mortgage at all.

Different lenders will have different criteria for determining safe and unsafe lending situations. Typically, if you have a score below the 600 mark, you’ll have trouble obtaining a mortgage.

If you’re worried about a low credit score, don’t despair – you can still get a mortgage, you just might have to work a little harder to get one. Some lenders will still lend to people with lower credit scores (just make sure you’re approaching legitimate lenders and not mortgage scam artists). Or, if time is on your side, you can work toward building up your credit score so that when it comes time to take out a mortgage, your score will be more appealing to lenders.

Your Credit Score Affects What Types Of Mortgages You Can Obtain

The second thing a lender learns from your credit score is which types of mortgages you qualify for. If a lender sees you as a higher risk, they won’t necessarily be willing to offer you just any old mortgage.

In most cases, if you have a credit score of less than 620, you won’t qualify for a conventional mortgage. In addition, if you have a lower credit score, you may have to make a larger down payment in order to qualify for the type of mortgage you want.

Your Credit Score Affects Your Interest Rate

The final thing that a lender learns from your credit score is what type of interest rate they’re willing to offer you. As a general rule, the higher your credit score, the lower the interest rate.

However, just because you have a high credit score, that doesn’t mean you’ll automatically get a great mortgage rate. There’s more that goes into the price of a mortgage than just the interest rate, so watch out for additional factors like extra fees, mortgage insurance, lock-in periods, and so on.

Your credit score tells a lender a lot about what type of borrower you are. Ultimately, a higher credit score means that you’ll be able to borrow money at a lower interest rate. But if your score is low, don’t worry – there’s a lot you can do to bring up that score before you apply for a mortgage, so don’t throw in the towel just yet!

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