Consumer Mortgage Tips
Consumer Mortgage Tip #1:
The first step in buying a home is to learn what you and your household can afford.
Your goal will be find a highly reputable mortgage lender who will educate you on the various programs available, so that you can choose a suitable and safe program that best fits the needs of you and your family. An ethical lender will offer you options, and may offer a recommendation on which program will be best for you in both the short run and long run.
Consumer Mortgage Tip #2:
Work with your lender to understand, raise, and maintain a healthy FICO score and a clean, accurate credit report.
Work with your lender to understand, raise, and maintain a healthy FICO score and a clean, accurate credit report.
Think of maintaining a 'healthy' FICO score as being just as important as maintaining your personal physical health. Neglecting your FICO and credit reports can cause time-consuming and frustrating problems, as well as being costly. By learning to keep your score high, you will be able to borrow money less expensively, when it is time to buy a home.
Consumer Mortgage Tip #3:
Create a homeownership plan.
Create a homeownership plan.
Putting together a two-month, one-year or two-year plan will allow you to focus on, and achieve, the important goal of owning your own home.
Consumer Mortgage Tip #4
Do not limit your loan research by being a 'Rate Shopper'!
Since 2004, I have counseled well over 2000 households, and have helped many families achieve homeownership. However--I have noted a recurring and very frustrating problem. Once consumers begin to understand the loan process, they sometimes lose the big picture by only 'shopping' for a the lowest loan rate. This strategy can lead consumers to a dangerous mortgage situation: a consumer may have been directed to what seems to be a good rate, but the loan attached to that so-called 'great' rate is packaged with an unsuitable loan.
A great mortgage professional is not going to quote merely rates -- a great mortgage professional will ensure that all the best options available for you and your household have been considered, and to do that, they have to understand many details about you, including the following: Have you (or your co-borrower) owned a primary residence in the last three years? Have you ever invested in the CalPERS or CalSTRS retirement system? Are you an active or retired member of the military? Do you work in a school district with at least one high-need school in the State of California? Will you live in the property? The answers to these, and many other questions, will enable your mortgage advisor to accurately identify and recommend correct financing options.
Preparing for homeownership is a process. For your financial health, and the financial well-being of your entire household, take the time to understand the big picture.
Consumer Mortgage Tip #5
It is ALWAYS a good time to put together a Homeownership Plan!
This MAY be a good time for you and your household to buy a home. Interest rates are still historically low. The key factors include: 1) what can you AFFORD, and 2) that you must be matched with safe, suitable financing.
You would want to consider many factors: do you (and your spouse) have stable jobs? Do you plan to stay in the area for two or more years? Are you eligible for CalPERS or CalSTRS benefits? Are you an employee at a public school? A highly trained mortgage advisor will ask you many questions to match you and your family with all the programs that you may qualify for....this is called "layered" or "lasagne" financing.
You will begin by learning what you and your household can afford.
Understanding your personal financial situation will put you into a
position of power as you work toward your goal of homeownership.
Creating your own personal plan is important, as the tax advantages of homeownership are significant. For example, a household that earns $65,000 per year may save as much as $600 each month, or $7200 each year, in taxes as a homeowner, as opposed to being a renter, which offers no tax advantages.
Work with a high-level mortgage professional -- look for the designations "Certified Mortage Planner" or "CLA". Consider the Lenders Who Care national nonprofit resource at http://www.lenderswhocare.org/. A great mortgage advisor will ensure that you are matchedwith Suitable Financing.
Your mortgage advisor will review your credit history and FICO score, for no fee, to help you understand whether or not this is a good time for you to buy.
You will greatly help yourself by understanding that preparing for homeownership is a process. For your financial health, and the financial well-being of your entire household, take the time to understand the big picture.