It’s Your Life If you plan to purchase a home in the near future, or if you are planning to refinance your current mortgage, you should understand the importance of the decision that you are about to make. The word mortgage is derived from two French words. The first word MORT means death, and the second word GAGE means pledge. Together they mean, in effect, that you are about to enter into a death pledge. This sounds a bit grim and may overstate the gravity of the commitment that you are about to make, but no matter how you look at it a mortgage is a serious commitment that deserves your attention.
Pre-Qualification Makes Sense I have been a Florida mortgage broker since 1989 and run a mortgage company that serves the states of Florida, Georgia, Massachusetts, and Virginia. I speak to a significant number of people on a daily basis about their finances. Often people will call and ask to be pre-qualified months before they have begun the process of looking for a home. This is something that we strongly encourage. In some cases these prospective home owners are perfectly qualified and there is little that they need to do to prepare for making a formal mortgage application. But this is the exception to the rule. The majority of people that we speak to could benefit greatly by organizing their finances before making application. Patience Makes Perfect When we see that a prospective home owner could benefit from some preparation before shopping for a home we are happy to help them structure a detailed plan. In most cases sixty to ninety days of preparation is sufficient to move a borrower into the position to qualify for a better mortgage with a lower interest rate. Would you be surprised to hear that many people have trouble waiting that extra couple of months to purchase a home? This is in spite of the fact that they may have been renting for years prior to considering home ownership. It seems that the moment that the thought of buying a home occurs to most people they feel compelled to start shopping. Please consider the benefits of a little bit of patience. One Percent Goes a Long Way Unless you are well qualified and have perfect credit you may discover that a bit of preparation will save you more than a full percentage on your interest rate. As an example, if you were to borrow two hundred and fifty thousand dollars a single percentage point on your rate will mean a difference of one hundred and sixty four dollars per month. That adds up to almost two thousand dollars per year – and sixty thousand dollars over the life of your mortgage. For many people the annual savings of two thousand dollars could be well used on other things. It may not be likely that you will have your mortgage for a full thirty years, but regardless, the potential savings will add up. Pick Up the Phone Pick up the phone and call your friendly mortgage broker. As a Florida mortgage broker these are the calls that I love to get. Prepared customers make our job easy. Tell your mortgage broker that you are planning to purchase a home or refinance in the near future. Ask for their advice. You should specifically ask them what things you can do over the next two or three months that could make a difference in your interest rate. A good mortgage broker will run your credit for free and be willing to take the time to review your entire situation. The Game Plan Everyone has a different situation so the advice that your mortgage broker will give you will, of course, be custom tailored for you. But there are several important categories that can have the largest impact on your ability to qualify for the best and lowest cost mortgage possible. The content of your credit report will be very important. There are quite a few powerful credit repair strategies that your mortgage broker might suggest which could have an important impact on your credit score within any sixty day period of time. In addition to your credit the other categories include your income, your assets – including the handling of any gifts you might be receiving, and your property. In each of these cases there are strategies for preparation and documentation that can make all the difference. Copyright © 2007 James W. Kemish. All Content. All Rights Reserved. Jim Kemish is the president and founder of Power Mortgage, a Florida mortgage broker based in Delray Beach, Florida. Power Mortgage Corp was established in 1989 and serves the states of Florida, Georgia, Massachusetts, and Virginia. Jim is also the President of Sky Blue Credit, a national credit repair business. And for great mortgage and credit tips visit the Florida Mortgage Blog.
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