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Mortgages for Dummies

There is a lot of information involved when it comes to buying a home, obtaining a mortgage or refinancing a mortgage. You have closing costs to consider, interest rates to look at, mortgage loan programs to decide between, and much, much more as well. While having a home can be a very rewarding experience obtaining a mortgage loan can sometimes be a very scary and overwhelming experience. There is way too much information for the average consumer to learn, to become an expert in the area of mortgages. However by taking a little time to learn the basics of mortgages and the mortgage process, a consumer can end up saving tens and possibly hundreds of thousands of dollars on a home loan, which is normally the biggest investment in a consumer's life.

The first place to start would be to check your credit. You should pull what is commonly referred to as a tri-merge credit report. This will pull data in from all three credit bureaus. You should verify that all information is correct and updated. It is very common to find errors and you will probably want to correct them before applying for a mortgage.

On your report you will be given three credit scores. Most lenders use the middle of the three scores to base their lending decisions on. A qualified mortgage professional can help you through this process and advise you best on how to correct any errors.

Consider being pre-approved before shopping for a new home. Most sellers look more favorably upon an offer to purchase if it is submitted with a pre-approval letter. You will also be able to find out how much home you can afford by being pre-approved.

An important factor to remember when shopping for a home is affordability. Most mortgage loans had interest rates that did not change over the life of the loan. In the past, choosing a fixed rate mortgage loan meant comparing interest rates, payments and fees. Today, many loans will allow for smaller payments for a set period of time to help you qualify for a larger loan amount.

When looking at purchasing your first home, an important consideration is how long you plan on staying in the property. If you only plan on staying in a home 5 years or less, a different course of action can be taken to purchase your home.

DISCLAIMER: The information contained in this article on 'Mortgages for Dummies' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.

Mortgages for Dummies

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