Knowing what you are getting yourself into will help you get better prepared, avoid costly mistakes, find better deals and, most importantly,  get the best help.

Being prepared will guarantee that you ask the right questions which will in turn show you did your homework and, by itself command respect and quality services.

Be careful what you which for as you just might get it!

Too many homeowners have been taken advantage of by unscrupulous mortgage brokers who convinced them they could spend more and buy the house they really whished for; the house of their dreams... to find out a little later, or in late 2007 if you live in North America, that their budget couldn't stretch enough to follow the rise of interest rates.

Mortgage brokers, just as loan officers by the way, are like sales people: they have quotas to fill and do receive a commission on the loan they are getting you to sign.

I hope this does give you perspective if and when you are offered a loan for a higher interest rate or for more than you think you can afford as it's your family's home you are risking here. It just might be worth it to wait a little and fix whatever problem, whether it be your credit score, your credit ratio or your work history, so you can get safer and cheaper financing opportunities.

I hope I don't offend anyone when I say you shouldn't trust loan officers any more or less than any other sales people: most of them are good, honest and hard working individuals but they can't humanly be 100% impartial when they gain to benefit by getting you to sign for a mortgage that's just a little higher or at a bit of a higher interest rate, which brings me to point number 2.

Interest rates are negotiable.

Long gone is the time when you could get a lone based on your reputation and your relationship with the bank's manager.

Computers have made this much more impersonal and credit scores are now the key to your house (I couldn't resist this one).

To make a long story short, gone is the time when you had to beg for a loan. To financial institutions, you are a paying customer and therefore, you should behave as such and see this as any other type of transaction in which a sale takes place: you should visit at the very least 2 different money lenders but ideally 3 and then make them compete for your business so you can get the very best deal.

Doing this could end up saving you thousands of dollars or shave years off your mortgage.

Nothing ever costs what we whish it did.

Before you visit your lender, make an optimist, a pessimist and a realistic budgets.

Be aware of how much you can afford to spend monthly for your lodging including: taxes, insurances, expenses such as landscaping, snow removal, pool maintenance, repairs, decorating, utilities... and factor them in your payments.

Your lender will suggest numbers but this is one of the two most important times to keep a cool head and remember your homework.

You may or may not be able to afford exactly the house of your dreams but remember that:

Houses do evolve with time.

Maybe you can afford your dream house and that's fantastic but if you can't, keep in mind that you can, in the future, get the house you can afford to look and feel and be the house of your dreams, especially of you have access to a little sweat equity.

It's always time to add a new patio, to replace the windows or to buy a spa...

Posted by Eric Stephens on December 13, 2008 at 12:00 AM

About Eric Stephens
Eric Stephens is affliated with RE/MAX Professional Realty, which is located in Lebanon, MO. For further assistance please use the contact information located on the right.




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