Remember the good old days when you were young and carefree? When the only things you had to worry about was what time your favorite cartoon came on (mine was a crazy short lived science fiction cartoon called G Force) and whether or not your mom was cooking lasagna tonight? Well, those sublime days may be over, but that doesn t mean that your next home purchase can t hearken back to those enjoyable times. Is that hard to believe? Well, it’s true! Keep reading and you ll learn the top four tips to make sure the next time you are getting a new home, you make it as pleasant as humanly possible.
First, you should make a habit of checking your credit reports at least once a year, and you should particularly pay attention to them just before beginning the mortgage application process. If there is a mistake, you can kiss your worry free home buying experience goodbye because you probably won t get the mortgage, at least at a reasonable rate of interest. Close out any and all credit cards you don t use regularly, and stay well below your credit limit. Exceeding 80 of your limit is a big no no when it comes to boosting your credit score.
Second, you will be well served to use a mortgage broker who is not simply an employee of a large lending institution. Instead, consider hiring a broker who is independent. This will allow them to shop the market to secure the most competitive terms for you.
Third, get pre approved for a mortgage. This is as close as you will be able to get to a cash buyer in terms of your ability to command a strong bargaining position in the eyes of the seller. Have the lending institution provide you a written copy of your pre approval, and make a number of copies. Then on any home you make an offer on, attach a copy of the pre approval letter with a time sensitive offer (say 24 hours). This way, you can make an offer at substantially less than their asking price, and they will be tempted to meet your asking price simply because they don t want the offer to expire and them to be left holding the property.
Fourth, make an honest assessment of what loan program is right for you. This is not a one size fits all deal. However, as a general rule, always err on the side of providing maximum flexibility for yourself from a cash flow perspective. For example, you might pay a slightly higher rate for a 30 year fixed mortgage versus a 15 year fixed mortgage; however, your payment with the 30 year will be much lower. Life has a way of being totally unpredictable, so plan accordingly by keeping your fixed monthly expenses as low as possible. If you end up having more cash flow, you can usually always add more money each month to make your 30 year note pay off in 15 years without incurring penalties.
Yes, it’s hard to believe that just yesterday you were a carefree kid who really enjoyed life. Now you may be mired in the unending complexities of being an adult in the modern world. But if you monitor your credit, use an independent mortgage broker, utilize getting pre approved for your loan as an aggressive marketing tool, and remember to choose a loan that maximizes your cash flow, you can at least make buying your next home a hassle free experience.
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