The Right Home Mortgage Advisor Can Save You Thousands

If you are thinking of buying a home and are in the market for a home mortgage, you'd better start doing your homework right now. The reason is pretty simple - things have changed and the days of easy home mortgages are gone.

Getting mortgage money was relatively easy just a few short months ago. That was When house prices were steadily rising and homes were selling practically before they were listed. But that was then and this is now. Things have cooled off a lot, and with a slow down in the real estate market has come higher interest rates along with tougher conditions for getting mortgage approvals.

Perhaps most important, interest rates have been rising slowly for a number of months. This may not seem like a big deal if you are new to the home buying market. But on a large home mortgage even a small interest rate increase 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.

In other words, a bank is fine if you don't care about getting a better deal. However, if you want lower cost or more flexible alternatives or you need creative suggestions you're better to go somewhere other than your bank.

But where can you go? You should look for a home mortgage advisor who specializes in personalized service - someone who knows the market from the inside and who has access to many different sources of mortgage funds.

**Good news for home buyers**

Even when credit starts tightening up there are ways to get a good deal on a home mortgage. Sometimes these good deals involve government backed loans such as FHA loans. These loans exist to help people with even horrible credit to borrow as much as 97 percent of the value of their home. The primary requirement is that they have the necessary income to make regular payments.

Home mortgages like these make home ownership possible for many people who might not otherwise qualify. So they are very good deals 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 might be right for you**

Another mortgage option is called the "option adjustable 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.

But this approach does give a borrower the option of making drastically reduced payments for a short period of time. It is used most often when a person has serious short term cash flow problems, or when they forsee their financial situation significantly improving a year or two in the future.

**Make the right mortgage choices**

While it is more difficult than ever to get a very low rate on a home mortgage there are still money saving deals available if you know where to look. That's why it is crucial to deal with an experienced professional advisor you can trust. Look for someone who has intimate knowledge of the current home mortgage situation and who is experienced in dealing with your type of situation.

The best advisor is a broker with years of experience and hundreds of different lenders to draw on. That kind of broker can find an affordable mortgage for almost everyone.

~Dean Weber (www.mortgages-mall.com).  Article courtesy of Article Rich.