Perfect Mortgage Considerations

  1. Is there a perfect mortgage for all?
  2. What are the different ways to pay for buying the house?
  3. What is the most important factor when getting a mortgage?
  4. Do different lenders offer the same package with same interest rates and other options?
  5. What is the first thing most people think about when looking for a mortgage?
  6. Should one shop around for a mortgage or get it from a lender offering the lowest interest rate loan?
  7. What other costs to consider in addition to mortgage payments?
  8. Should I consult other friends or relatives who bought houses?Should I also consider same questions when refinancing?

There is no perfect mortgage for all. One mortgage may suit one buyer but not other. We all have different needs, different situations, different incomes, and different payment options. One mortgage can not suit all. We must understand our needs before we shop for a mortgage.

There are basically two ways to finance your home; your money or someone else’s money. There is no other option. One should not think that it is best to buy with your own money if you have that much. Sometimes it is better to finance your home because you may be able to claim mortgage costs/interest against your business income when you are using your home for your business as well or you can invest your money your money somewhere else to make better returns. It is your money, therefore use it wisely. Consult with your accountant or investment adviser before using your money to purchase a home.

The most important thing people look at when shopping for a mortgage is interest rate. And that makes sense because no one should pay more than necessary. If interest rates are same, is there more to a mortgage than interest rates? Yes, yes, yes! Mortgage packages vary significantly from lender to lender, with no two lenders offering identical packages of features and options. Mortgage selection process is confusing and difficult. Therefore, always shop. All lenders promote their packages as best for the borrower. Yet with large amounts of money involved today, a small mistake can cost fortunes. Usually look for combination of the following factors when getting a mortgage:

  1. Liberalized prepayment options
  2. Options and features that offer most flexibility when renewing the loan or selling the house
  3. Lowest possible interest cost with fewest hidden charges
  4. Mortgage package best reflects your particular circumstances
  5. Closing costs
  6. Time frame for which interest rate is offered
  7. Payment options/flexibility when you are unable to make few payments because of inevitable circumstances
  8. Sum total of your annual mortgage payments against your annual income
  9. Consider property taxes, utilities, property maintenance expenses as well as insurance costs in addition to mortgage payments
  10. Options available on maturity
  11. Strengths and weaknesses of long and short term martgages

It is always a good idea to make a checklist of important items before shopping around for a mortgage because no one can remember all important things to consider in front of mortgage advisor. Mistake will be costly, because of the amount involved. After you have found the package that best suits your needs, you must make sure that all those things promised are actually in the contract before you actually sign it. Never trust mortgage advisor or anyone else even if they belong to trust worthy agency or institution. Don’t rush, be patient and take as long as it takes.

Also consider speaking with family or friends who recently financed their home. They may offer a tip or two that can help you. Welcome information even from colleagues or strangers and weigh all the tips against your own research and personal circumstances. Never lose your research work. Always keep it somewhere for you future reference because you may need some of it when refinancing. Refinancing is as difficult as getting mortgage first time with the only difference that you already have the property in your hands. Always keep your payment records and keep your credit history clean otherwise refinancing may cost you more.