Getting Mortgage Money Was Relatively Easy Just A Few Short Months Ago

Category: Finance, Mortgages.

If you don' t already know it, the real estate market has changed in the last couple of years and the days of easy home mortgages are gone. Getting mortgage money was relatively easy just a few short months ago.

So if you are in the market for a home mortgage, it's time to start doing your homework. That was When house prices were steadily rising and homes were selling practically before they were listed. Things have cooled off a lot, and with a slow down in the real estate market has come higher interest rates along with tougher conditions for getting mortgage approvals. But that was then and this is now. The most important change is that interest rates have been on the rise for several months. But the truth is, on a large home mortgage even a small change in the interest rate can make a very big difference to your payment.

If you are new to the house buying market this may not seem all that significant. In fact it is usually the interest rate that determines how much you can borrow, so it is the interest rate that often makes the difference between being accepted or rejected for a home mortgage. To qualify you for a home mortgage the lender determines what payment level you can afford. The reason is simple. And since a big part of your payment will be interest, a higher interest rate could easily put the payment out of reach. * The importance of your home mortgage advisor* * Before making home mortgage decisions you should find a professional advisor who has a lot of experience in the home mortgage business. The best advisor has in- depth experience and current knowledge of real estate and mortgage trends.

Often the best advisor is a mortgage broker not directly affiliated with any one lending institution. This kind of mortgage advisor also can make use of many different sources of mortgage funds. Banks work with their own products and are not interested in making you aware of other products that might offer a better deal. This will usually not be your friendly neighborhood banker. Look at it this way- if you have a good credit rating and a good reliable income lots of lenders want your business. On the other hand, if your credit rating is spotty or you have cash flow problems you may need some creative suggestions. So chances are if you shop around you will find a better deal than the one your bank is offering.

In this case your bank is not likely to be of much help either. So really the only time you should use a bank is when you are not concerned with getting a better deal. They want you to do it their way and meet their requirements. The altenative is to find a home mortgage advisor who knows the market inside out and who has access to many different solutions from many different sources. * Good deals are still available* * Even when credit starts tightening up there are ways to get a good deal on a home mortgage. These loans exist to help people with even horrible credit to borrow as much as 97 percent of the value of their home. Sometimes these good deals involve government backed loans such as FHA loans. The primary requirement is that they have the necessary income to make regular payments.

That usually makes them a very good deal for many people. People who might not otherwise qualify are given a shot at home ownership by mortgage plans like these. But many traditional lenders will not recommend them because there is not enough profit in it for them. Even most mortgage brokers will not do these loans because they involve a bit of extra work. Some traditional lenders are not even aware these alternatives exist. But from the borrower's point of view it is well worth finding a mortgage broker who will go out of his or her way to put together the best deal for you.

If you qualify for this kind of home mortgage you could pay as little as 1% interest against a" real" rate of about 25% . You could save literally thousands of dollars with the right home mortgage package. * An ARM might be right for you* * Another mortgage option is called the" option adustable rate loan" , commonly referred to as an ARM. To qualify you need a very good credit rating. The unpaid interest is added to the principal of your loan, so the amount you owe is actually increasing. But you must be careful with plans like this. Eventually you will have to start making payments against the increased principal amount. After two or three years your payments could end up being more than you can afford to pay.

So your payments will no doubt be higher than they otherwise would have been. But what an ARM does is it creates the opportunity for a borrower to make much lower payments for a short period of time. But you have to know how to find those sources, and that's why it is so important to deal with an experienced professional advisor you can trust. Its most popular use is for people who have short term cash flow problems, or when borrowers see their financial situation improving in a year or two. * Make the right mortgage choices* * While it is becoming more difficult to qualify for a home mortgage, and more expensive to afford one, there are still money saving deals available from many different sources. Look for someone who has in- depth knowledge of the current home mortgage situation and who is experienced in dealing with situations like yours. That kind of broker can find an affordable mortgage for almost everyone.

The best advisor is a broker with years of experience and hundreds of different lenders to draw on.