The Right Home Mortgage Advisor Can Save You Thousands

If you are in the market for a home mortgage, it's time to start doing your homework. If you don't already know it, things have changed in the last couple of years and the days of easy home mortgages are gone.

During the real estate boom of the last few years prices were rising like crazy and mortgage money was easy to come by. But as things started cooling off most banks and lending institutions began to tighten their lending practices.

The most important change is that interest rates have been on the rise for several months. If you are new to the house buying market this may not seem all that significant. But the truth is, on a large home mortgage even a small change in the interest rate can make a very big difference to your payment.

In most cases the interest rate can even make the difference between being accepted or rejected for a home mortgage. That's because in order to qualify for a home mortgage your ability to afford the payment is one of the most important criteria for getting approval. And a higher interest rate could easily put the payment out of reach.

**Find a home mortgage advisor**

Before making home mortgage decisions you should find a professional advisor who has a lot of experience in the home mortgage business. Often the best advisor is a mortgage broker not directly affiliated with any one lending institution. The best advisor has in-depth experience and current knowledge of real estate and mortgage trends. This kind of mortgage advisor also can make use of many different sources of mortgage funds.

Often your best choice will not be your regular banker. Banks almost always recommend their own products and are not very interested in suggesting other products - even if they are a better deal for you.

Look at it this way: if you have a good credit rating you can probably get a better deal than the one your bank is prepared to offer. On the other hand, if you have credit problems or need some creative suggestions, you'll probably not get them from a bank. They want you to conform to their requirements and rules.

Yes, a bank is fine if you aren't interested in getting a better deal. However, if you want alternatives or creative suggestions you're better to go elsewhere.

The altenative is to find a home mortgage advisor who knows the market inside out and who has access to many different solutions from many different sources.

**Good deals are still available**

Even when credit gets tighter there are ways to get a good deal on a home mortgage. These good deals sometimes involve government backed loans such as FHA loans. Loans like this help people with very bad credit to borrow as much as 97 percent of the value of their home. The biggest requirement is that they have the necessary income to make regular payments - in other words, a steady job.

People who might not otherwise qualify are given a shot at home ownership by mortgage plans like these. That usually makes them a very good deal for many people. But many traditional lenders will not recommend them because there is not enough profit in it for them. Some traditional lenders are not even aware these alternatives exist.

In fact Even many mortgage brokers will not recommend these loans because they involve some extra work. However, from the borrower's point of view it is worth finding a mortgage broker who will put together the best deal for you. It could make an otherwise impossible mortgage a reality, and it could save you literally thousands of dollars over the life of your mortgage.

**An ARM can be a good short term solution**

Another mortgage option is called the "option adustable rate loan", commonly referred to as an ARM. If you qualify for this kind of home mortgage you could pay as little as 1% interest against a "real" rate of about 7.25%. To qualify you need a very good credit rating.

But be careful with plans like this. The lending institution will add the unpaid interest to the principal of your loan, so the amount you owe actually goes up over time. That means that eventually you will have to start making payments against the increased principal amount. So your payments will actually be higher than they otherwise would have been. You could end up with payments that are more than you can afford to pay.

What this approach offers is the opportunity for a borrower to make drastically reduced payments for a short period of time. Its most common use is for people who have short term cash flow problems, or when a borrower sees his or her financial situation improving in a year or two.

**What a different the right mortgage makes**

While these days qualifying for a home mortgage is more difficult, and affording a home mortgage is more expensive, there are still ways to save money - especially when your advisor can bargain between a number of different money sources. To find these deals it is very important to find those sources. That is why it is so important to deal with an experienced professional advisor you can trust. This person will have in-depth knowledge of the current home mortgage situation and be experienced in dealing with situations like yours.

The best advisor is a broker who has hundreds of lenders to draw on, so almost everyone can get what they are looking for.

Article Source: http://www.articles.ask-me-about.com

Dean Weber has more than 20 years experience as a home mortgage advisor, providing commercial mortgages and all types of loans.