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Pre Mortgage

Posted by  on Apr 16, 2009
 
If you are considering getting a mortgage, there are a few things to keep in mind. For instance, it is a good idea to remember that over the past few years, mortgage regulations have changed, making options more extensive. Changes in the way you approach your quest for a mortgage and small differences in the way you structure your mortgage can a lot of money. Remember that it is important to inform yourself about all the factors involved. Before you commit yourself to monthly mortgage payments, make sure that you consider a few common things that people tend to forget.

You should consider your goals and possible situation before deciding upon the type of mortgage that will suit your desires. Make sure that before you decide, you consider a few things such as: how long you plan on owning the property, if it will be your primary residence, if you plan to rent the property, what direction are interest rates going in, and how quickly. Think about if your income expected to change in the near term and how much money you want to use towards your mortgage.

You should also make sure that you are fully aware of your limitations and comfort level. You should know what dollar amount you feel comfortable committing to because your situation could qualify you for an amount that is higher than the amount you might be planning to pay each month. By working out your figures, you can determine what home price this will equate to with the current interest rates, thus you will not waste time looking at property which is not in your price range.

Also, make sure that you consider checking your credit before mortgage shopping. If you knowing that you have good credit, it will help when applying for a mortgage. If your report is not flawless, you can fix the problem as long as you are aware beforehand. It is a good idea to get a credit checkup before meeting with mortgage brokers and lenders.

Make sure you understand what prepayment privileges and prepayment frequency options are available to you. More frequent payments can shave years off your mortgage. Simply structuring your payments so that they bill out more frequently, will significantly lessen the amount of interest that you will pay over the term.

Prepaying a percentage of your mortgage, or increasing the amount you pay monthly, will have a major impact on the length of your mortgage and can shorten your payment term considerably, building equity in your property more quickly. These two payment options can cut years off your mortgage and save you thousands of dollars in interest.

Keep in mind that not every mortgage has these prepayment privileges and some carry prepayment penalties, so make sure you ask about these options before you select a mortgage. When looking for mortgage, you should also keep in mind that a portable mortgage, where available, is one that you can carry with you when you buy your next home and avoid paying any discharge penalties.

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