Lowest Mortgage Rates 4U

Prepare Before You Buy

Get Pre-approved for a mortgage The very first thing you should do even before you start looking at houses is go to a lender (bank, mortgage broker, credit union...) and get pre-approved for a mortgage. This will accomplish a number of things for you: You will find out how much you can afford. This can help save you time and possible disappointment. The last thing you want to do is fall in love with a place and then discover you can't afford it. You can get a copy of your credit rating. Your lender will request this in order to pre-approve you. Be sure to get a copy of that credit file from them. You're entitled to it. Then you can start looking at houses while you continue to check out mortgage deals. Your pre-approval will give you an idea of the monthly payments that you will have to make for your new home. You may also be able to get a "lock" on your interest rate for some specified period of time. This may save you a lot of money. A pre-approval is reassuring to the seller. Keep in mind, sellers are just as concerned about a deal going through as buyers. The seller will be more comfortable with a buyer who has financing lined up. This could help you with your negotiation efforts.

Once you have been pre-approved consider what your monthly payments will be. Take a look at your spending patterns as well. Although you may have been approved for a mortgage of $250,000 you may find that you really don't want one that big because you don't want your payments that high. The time to think about this is before you buy. Just because a lender says you are capable of handling a certain level of debt, you may want to be a litle conservative in case of emergencies. Take this into account and consider houses at a lower price point if you want to keep your mortgage lower.

Finding the Right House

Now that you have been pre-approved for a mortgage, you know the maximum you can spend on a house. However, like we said above, you may want to be a little conservative. Consider your current spending habits.

• How much do you currently spend for housing per month?
• Have you been able to save any money each month?
• Are you willing to apply that money toward a house payment?
• Are there any spending habits you can curtail in order to apply that money to your new mortgage?

After you have made the financial adjustments, you may discover you won't be able to find an acceptable house for the money. Well, there is no magic. Something has got to give. Now you must decide whether to lower your expectations, delay your house hunting until you can afford to spend more or increase your risk.

Perhaps your financial future is bright. You have a good job that pays well, and you have a spouse who is also making good money. You also are confident your income will be increasing. Based on these factors you may decide to take on additional risk and become temporarily house poor. While this may not be the most prudent thing to do, at least you will be doing it with your eyes open.

Now you should know the maximum amount you are willing to spend on a new house. At this point you should create a list of features you would like in a new home. Separate the items into two columns - "Gotta Have" and "Wanna Have".

Now you are rready to start looking. DO NOT LOOK AT HOUSES THAT COST MORE THAN YOUR ESTABLISHED MAXIMUM! This is the toughest part of house hunting, but all you will do is set yourself up for dissapointment. If you are using real estate agents, make this a rule with them.