Pro Mortgage Tips For Terrible Mortgage Markets

It’s no secret. It’s not easy to get a mortgage right now. Odds are you already know or will know someone who is directly affected by the current credit crunch.

A historically large percentage of Fairfield County homeowners are defaulting on their mortgage loans every single day. The banks and lenders see this and become afraid to give out more money. They are afraid that more people will not be able to pay back their loans.

Unfortunately, they are going too far. Lenders have given mortgage money to risky borrowers and now the rest of us are suffering.

It’s not your fault you are having trouble getting a loan. People with excellent credit and good incomes are having trouble getting approved every day. There are some easy steps for you to take and a few tricks that you can use to get your interest rate down.

Here’s a neat trick to getting a lower interest rate:

Ask The Homeowner To Buy You A Lower Interest Rate

Does that sound crazy? It’s actually very simple and I thought it was pure genius the first time I heard about it.

Instead of offering less for the home you want to buy you can ask for the seller to give you money back at closing. It’s called a sellers concession and you can use it for anything. I used one when I bought my own home to help pay for closing costs. Maybe you might benefit from using one to pay points on your mortgage as a way of getting your interest rate and monthly payment lower.

Common Interest Rate “APR” Rip-Off

Beware the mortgage salesperson who tells you the annual percentage rate. They are likely hiding big fees from you. They get papers in front of you with a low rate and then WHAMO! they surprise you with huge fees. They are hoping that you will be close to the closing table by the time you figure out how they tried to screw you.

I’ve seen it happen too many times to good people and I don’t want you to be the next victim of a predatory lender. Always compare the APY. It’s the annual percentage yield. The APY is a number that is quoted as a rate but it includes your mortgage interest rate and all of the fees. Compare APY’s to be sure you are getting what you deserve.

Make a Down Payment of 5% or More

The banks with the money want to see you have a vested interest in keeping your home without missing a payment. The very last thing they want to see you do is go into foreclosure. It costs them time and lots of money. There is no better way to show the bank that you are a responsible mortgage customer than having a percentage of your hard earned money tied up in the house along with theirs.

For eight more mortgage tips for intimidated or frustrated buyers read Mortgage Myths Exposed.

Connecticut Realtor©