If you can afford the higher payments, or are willing to buy a less expensive home, a 15-year mortgage can save you thousands of dollars in interest and can allow you to own your home free and clear in half the time. Fifteen-year interest rates are about one percentage point lower than 30-year rates, and you might be surprised how much the combination of a lower rate and shorter amortization period can save you.
Some people don’t know the first thing about getting a mortgage loan. They hear reports of dropping interest rates and lower home prices and hastily decide to jump into home ownership. But the process of getting a home loan differs from getting a car loan or renting an apartment, and applicants who don’t recognize these key differences are often disappointed when a lender denies their mortgage loan application.
If you do not shop multiple lenders, you’re doing yourself a disservice. Even if you are sure this is the lender you want to use, getting quotes from other lenders can help you negotiate a better deal. Not every lender will give you the same mortgage rate, or closing costs. This is why shopping multiple lenders is very important. Getting at least 3 or 4 loan offers is recommended.
“Now is the time to start the process. More than 75 percent of credit reports are said to have some incorrect data. Often a difference of two points in your credit score can make a drastic difference in your interest rate and/or loan fees. Making sure you are prepared from a credit standpoint is the most important part of the process. Secondly, make sure you are staying current on all your liabilities. And lastly, when you sit down with us, you will know you are with an industry leader in Movement Mortgage. We love and value people here at Movement. It shows in how we take care of you while guiding you through the process.”–Bodie Shepherd, Market Leader, Chico, CA
Start by requesting the free annual credit report you’re entitled to at AnnualCreditReport.com. “For each credit account you have, the report shows creditors’ names, the amount owed, the highest balance owed, available credit, whether the account is open or closed (and who closed it), the number of times a payment was past due, and whether the account is in default,” Freddie Huynh, a lead data scientist at FICO (Fair Isaac) for 18 years who is now Vice President of Credit Risk Analytics at Freedom Financial Network, explains.
Before you close on your new house, your lender will require you to buy homeowners insurance. Shop around and compare insurance rates to find the best price. Look closely at what’s covered in the policies; going with a less-expensive policy usually means fewer protections and more out-of-pocket expenses if you file a claim. Also, flood damage isn’t covered by homeowners insurance, so if your new home is in a flood-prone area, you may need to buy separate flood insurance.
*If a homeowner obtains a loan modification that changes the mortgage payment amount being made through the Unemployment Mortgage Assistance Program, the Servicer is responsible for notifying Keep Your Home California of the change, so the amount of benefit assistance can be modified accordingly. As long as the homeowner was still qualified under program guidelines, Keep Your Home California would then process the payment change at the earliest possible funding date.
Find information on mortgage assistance and foreclosure prevention programs from various companies, federal government agencies, non-profits, HUD counseling agencies, banks and states. Numerous organizations have pledged to provide loan modification and other forms of mortgage help to millions of Americans. Resources are available that can help prevent or stop foreclosures as well as assist homeowners with paying their current and back mortgage payments.