Mortgage regulations have changed over the last few years,.  Subtle changes in the way you approach mortgage shopping and even small differences in the way your structure your mortgage can literally cost or save you thousands of dollars and years of expenses. 

Before you commit your hard earned dollars to monthly mortgage payments, consider these 6 issues.  Effective consideration of these important areas can make your payments work much harder for you.


1.  You can, and should, get pre-approved for a mortgage before you go looking for a home.

Pre-approval is easy and can give you complete peace of mind when shopping for your home.  Your local lending institution can proved you with written pre-approval at no cost or obligation, and it can all be done quite easily over the phone.  More than just a verbal approval from your lending institution, a written pre-approval is as good as money in the back to a seller.  It entails a completed credit application and a certificate which guarantees you a mortgage to the specified level when you find the home you’re looking for.


2.  Know what monthly dollar amount you feel comfortable committing to.

When you discuss your pre-approval with your lender, find out what level you qualify for, but also pre-asses for yourself what monthly dollar amount you feel comfortable committing to.  Your situation may give you a pre-approval amount higher (or lower) than the amount of money you would want to pay out each month.  By working back and forth with your lender to determine what this monthly amount is and what value of home this translates into at today’s rates, yo won’t waste time looking at homes that are not in your price range.


3.  You should be thinking about your long term goals and expected situation to determine the type of mortgage that will best suit your needs.

There are a number of questions you should be asking yourself before you commit to a certain type of mortgage.  How long will I own this home?  What direction are interest rates going in and how quickly?  Do I expect my income to change (up or down) in the near term?  The answers to these and other questions will help you determine the most appropriate mortgage you should be seeking.


4.  Make sure you understand what prepayment privileges and payment frequency options are available to you.

More frequent payments (for example weekly or biweekly) can literally shave years off your mortgage.  Structuring your payments so they come out more frequently will significantly lessen the amount of interest that you will be charged over time.  For the same reason, authorized pre-payment of a certain percentage of your loan will have a major impact on the number of years you will have to pay and could shorten your payment term.  These two payment options can cut years off your mortgage and save you thousands in interest.  However, not every mortgage has these options so make sure you ask the proper questions.


5.  Ask if your mortgage is both portable and/or assumable.

A portable mortgage, where available, is one you can carry with you when you buy your next home to avoid paying discharge penalties.  This means that you will not have to go through the entire mortgage process again unless you are making a move up to a more expensive home.  An assumable mortgage is one that the buyer for your home can take over when you move to your next home.  This can be a powerful negotiating tool making it easier and more desirable for a buyer to buy your home. 


6.  You should seriously consider dealing with a Mortgage Expert.

 Enlisting a professionals services can make a significant difference in the cost and effectiveness of the mortgage you obtain.  For example, they can make the process faster thereby avoiding costly delays.  Typically there is no cost or obligation to enquire.   Leslie Bergen with Guaranteed Rate Mortgage is a true professional and can help you not only with a pre-approval or a loan but also helps those whose credit is just not where it needs to be.  Give us a call at 915-288-3925 and we can direct you to Leslie’s expert help.