The Right Home Mortgage Advisor Can Save You Thousands

by Dean Weber*

If you are thinking of buying a home and are in the market for a home mortgage, you'd better start doing your homework right now. The reason is pretty simple. Things have changed recently, and the days of easy home mortgages are gone.

During the real estate boom of the last few years prices were rising like crazy and mortgage money was easy to come by. But as things started cooling off most banks and lending institutions have tightened their lending practices.

Most important, interest rates have been rising slowly for a number of months. This may not seem like a big deal if you are new to the house buying market. But on a large home mortgage even a small interest rate increase can make a very big difference to your payment.

In most cases the interest rate can even make the difference between being accepted or rejected for a home mortgage. That's because in order to qualify for a home mortgage your ability to afford the payment is one of the most important criteria for getting approval. And a higher interest rate could easily put the payment out of reach.

Find a home mortgage advisor.

Whatever you do, don't start making home mortgage decisions until you hook up with someone who has a lot of experience in the business. Find an advisor who has intimate knowledge of current real estate and home mortgage conditions and has access to many alternatives.

This will usually not be your friendly neighborhood banker. Banks work with their own products and are not interested in making you aware of other products that might offer a better deal.

Look at it this way: if you have a good credit rating you can probably get a better deal than the one your bank is prepared to offer. On the other hand, if you have credit problems or need some creative suggestions, you'll probably not get them from a bank. They want you to conform to their requirements and rules.

So really the only time you should use a bank is when you are not concerned with getting a better deal.

The alternative 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 news for home buyers.

Even in these times of tighter credit there are ways for people to get a good rate on a home mortgage. Often these good rates involve various government backed loans such as FHA loans. These loans allow people with even horrible credit to borrow as much as 97 percent of the value of their home - as long as they have the necessary income to make regular payments.

Home mortgages like these are very good deals for many people. They make home ownership possible for many people who might not otherwise qualify. But many traditional lenders either don't know about these options, or they won't 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. 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. You could save literally thousands of dollars with the right home mortgage package.
 

An ARM might work for you.

There is also another type of loan available called the "option adjustable rate loan", commonly referred to as an ARM. This kind of home mortgage allows a person with very good credit to pay as little as 1% interest against a "real" rate of about 7.25%.

But beware. The unpaid interest is added to the principal of your loan, so the amount owed actually goes up over time. That means an ARM loan must be used very cautiously because a home owner can end up owing more than they can afford to pay.

But this approach does give a borrower the option of making drastically reduced payments for a short period of time. It is used most often when a person has serious short term cash flow problems, or when they foresee their financial situation significantly improving a year or two in the future.

Make the right mortgage choices.

While it is more difficult than ever to get a very low rate on a home mortgage there are still money saving deals available if you know where to look. That's why it is crucial to deal with an experienced professional advisor you can trust. Look for someone who has intimate knowledge of the current home mortgage situation and who is experienced in dealing with your type of situation.

The best advisor is a broker who has hundreds of lenders to draw on, so that almost everyone can get what they are looking for.

*Dean Weber has more than 20 years experience providing home mortgages, commercial mortgages and all types of loans.

The mortgages-mall.com team of professionals works with many lenders across the U.S. and around the world. We have  arranged mortgages for hundreds of clients in both the residential and commercial field.

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