10 Ways To Acquire A Mortgage

10 Steps to acquiring a home mortgage

 

 

1. The first step in acquiring a home mortgage is to gather the information you’ll need to include in a mortgage application.

2. Review your credit report by ordering a copy from the credit bureaus used by local mortgage lenders.
3. Prequalifying for a mortgage lets you know how much you can afford and makes you a more attractive buyer.
4. Conventional mortgages limit housing costs to 28% of gross income and total debt payments to 36% of gross income.
5. Mortgage terms are usually 15 or 30 years. The longer the term, the lower your monthly payment, but the higher your overall interest costs.
6. Thirty-year loans often permit additional principal payments. One additional monthly payment per year will reduce a 30-year loan to 22 years.
7. Interest rates are fixed or variable over the term of the loan. Variable rates may be best for buyers who plan to sell within three years.
8. Generally speaking, one point is worth 1/8 of 1% off the loan rate.
9. A balloon payment is a lump sum payable at the end of a specified term.
10. Points and interest on mortgages or home equity debt are usually tax deductible.