Knowledge You Need To Get Mortgage Loans

by SMD 

I happen to be, at this moment working with a mortgage broker to obtain a loan so that my wife and I can purchase our first home. Here’s an article that I found that I found useful during the process.

Hunting for the house of your dreams can be exhilarating. Unfortunately, hunting for the home loan of your dream is not nearly as exciting. The following advice can help you avoid problems.

1. When it comes time to sign your life away in blood on the final mortgage documents, take the time to read them. Specifically, take a close look at the math being used. It is often wrong!!!

2. In the old days, it took weeks to get approved for a mortgage. Many lenders now use a software program to determine if they will give you a loan. If your credit is in good shape, it can take as little as three days for approval.

3. Interest only loans are a fairly recent creation that lower your monthly payment by having you only pay the interest due without any principal. Be careful with these. If the property does not appreciate, you gain nothing.

4. To make sure the rates don’t change after a lender approves your mortgage, you can lock in the loan by paying a fee. This does not lock you into the loan, only the lender. If you subsequently find a better deal with another lender, take it!

5. Interest only loans are very popular these days since the let you get into a home with minimum monthly payments. Be aware, however, that these loans often automatically convert to an ARM at some point.

6. Should you go with a fixed or adjustable rate mortgage? In general, go with fixed when rates are low and an adjustable when rates are high.

7. Deducting the interest on a mortgage is a great tax benefit. Most people do not understand there is a limit to the deduction. You can only deduct the interest on the first million dollars of a mortgage.

8. The first step to finding a mortgage is to find a lender. You might be surprised to learn that a majority of lenders do not deal directly with the public! So, how are you supposed to find them? The answer is to use mortgage brokers.

9. Don’t assume anything about your credit. Before you apply for a mortgage, check all three credit agencies. Congress has determined that 50 percent of the negative marks on most people’s credit are errors.

10. ARM loans are tied to something called indexes. These indexes are gauges for the cost of borrowing money. There are five different indexes. The LIBOR rate – London Interbank Offered Rate – is a popular one.

Home ownership is the cornerstone of our society. The government and lenders know this and are a pivotal part of financing such ownership. In short, you should be able to get a loan, so don’t worry too much.

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