Mortgage Loan Finance Ideas

Your first consideration when you’re even just thinking about buying a house should be your credit rating and your credit score. Pull all three of your credit reports and go ahead and pay the relatively small fees to get your FICO number.

Use the FICO number when you play with the mortgage calculators online. The difference between a good score and a not-so-good score can mean tens of thousands of dollars’ difference in the amount you actually pay. If your credit is not too hot, take steps to improve it before you even go shopping for a mortgage.

Do your homework and figure out how much you want to pay in mortgage payments. The hot new trend is to underbuy. That means buying a less expensive house than you qualify for. Remember, the mortgage payment is only the beginning of the expenses you will have to meet. Do weigh renting against buying. Depending on where you live, it might be better for you to rent than buy. It’s better to compromise a little on the features of the house if it’s going to free you from the stress of an uncomfortably large mortgage payment. If the mortgage payment is reasonable, you can hasten the end of it by applying future increases in income toward the capital as you can afford to.

At this point, you can talk to your lender about pre-approving a home loan. This is better than ‘pre-qualifying’. It means your lender has committed to the loan and puts you in a better position, especially if there are other potential buyers.

The bottom line is two-fold:

1. Your rate is determined by your FICO score so take whatever steps you need to improve it before you apply for a loan.
2. Try to buy the least expensive house you can rather than the most expensive. Your odds of being able to afford the payments are much greater and you won’t be spending every waking moment supporting your house rather than living in it.

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