Authored by Rodney Southern in Mortgages
Published on 11-17-2008
With the current state of affairs in the economy and the housing market in particular, many people are trying to find ways to lower their mortgage payments. When you buy a new home, the mortgage should be near the top of things that you need to learn about. Fortunately, there are a number of things you can do to ensure that you get a great mortgage rate, as well as terms that you are sure to be able to keep.
The first thing to consider is your own education. There are so many things about real estate and mortgages that you would be a fool to go into a home purchase blind. Take some time to learn the terms, and the information that mortgage brokers will be throwing at you. Having a working knowledge is the first step.
Next you will want to do some serious networking. Lowering your mortgage rate is much easier if you have several companies competing for your business. If you are simply accepting the first thing that comes along, you are certain to be getting a bad deal. Do not keep it a secret that you are talking to other mortgage companies. As a matter of fact, announce it! You want each company to put their best deal on the table.
Put down the maximum downpayment. This is a very important part of getting the terms of the mortgage how you want them to be. If you are able, put down a minimum of thirty percent. This puts you well over that magic 20 percent point that mortgage companies hope for. It also gives you some choices about the mortgage.
One option that putting down a larger down payment gives you is the choice to opt out of Private Mortgage Insurance. This is not something you will want to have to pay and generally it will not be required if you put down more than 20 percent.
Another important consideration to lowering your mortgage payment is to extend the length of the mortgage. This option is not the best because it does mean that you will pay exponentially more interest. However, if the payments of the mortgage are too high, the interest will not even matter. You would be risking losing the home entirely. If you need to stretch the mortgage to safely pay it, then do so. You can always look into refinancing later when you can afford more.
Lowering your mortgage is really just a matter of thinking ahead. If you consider all of the terms of the mortgage and feel that you can not meet them, then do not sign on. Move on to the next company to see what they have to offer. You are not doing anyone a favor by taking on a mortgage that you cannot pay. This is what has caused the housing crisis in American today in the first place.
