Lower mortgage rates and increasingly lower home prices are enough to make a borrower decide to refinance or option for a new home. Mortgage rates have been in a steady decline, but that doesn’t mean that you need to seek out a new loan. You should begin by following a few steps before opting for a new home loan.
Check your current mortgage details
Make a note of the details of your mortgage; it’s the largest expense in most household budgets. Check important details of your mortgage, for example, the current rate, the type of mortgage, the deadline or term of the loan, any prepayment penalties, and how much remains on the loan. By checking these important details, you will know if you qualify for any refinancing opportunities.
Find out what you qualify for
Now that you know all details of your mortgage you can pursue new financing with the confidence. You should do a quick assessment of what you qualify for and what you can afford.
Determine where you can save
Determine the money you will recoup on the various mortgages for which you qualify. Plug the several options into any online mortgage calculator and plan accordingly.
With tightened lending terms, getting approved for a mortgage is not as simple as it has been in the past. Mortgage lenders will review your credit report and make loan offers based on your financial worthiness.
Brokers work with a network of lender contacts and have access to many options for borrowers. They can work on behalf of borrowers to find the best possible deal with lenders. They have access to products that may not be readily available to borrowers with the broker’s assistance.
The ratio of the loan value to home valuation (LTV) will determine how much you will pay for the money you borrow. For every five-percentage points of difference, the rate can correspond to a lower rate. This means that if you have money to place into a down payment to pay towards the cost of the home lowering the borrowing amount.