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How to Save Money on Your Mortgage


The process of obtaining a mortgage to build a new home can be confusing and stressful for anyone (and often is), but first-time home owners can be at a major disadvantage if they haven’t done their homework. Here are some things to consider before stepping into the potential quagmire of a home loan.

Find a Good Mortgage Lender

Don’t go with the first mortgage lender than comes your way. It’s a common misconception that all mortgage lenders are alike. We wouldn’t exactly compare them to snowflakes, but truth is each one is different in a variety of ways. Taking the time to find a lender that listens, is transparent and conscientious, and takes the time to explain details can establish a foundation for either a good or bad experience. A bad lender can cost you thousands of dollars by not responding in a timely fashion in order to lock in your mortgage rate. Also be aware that closing fees do vary from lender to lender.

While we don’t want to dissuade you from working with a bank that you trust, you might want to consider working with a local mortgage lender over a corporate giant where you’re little more than a number. You should also avoid finding a lender over the internet. Being able to sit down in front of your lender and talk face-to-face makes it easier to hold them accountable.

Do’s and Don’ts

Any good lender will tell you that when you’re considering making a big purchase such as property, you do not want to make any other significant purchases, such as buying a car. Hold off any big expenses until everything is signed, sealed and delivered!

Even if you’ve got the best credit score on the planet, it never hurts to prepare yourself by eliminating any debt that you owe. You can start now, before you’re even seriously considering, by paying off small credit cards. Whether you go through with your new home or not, this will help you save on interest and may even help you resist buying those new tires or pair of shoes!

If you do need help repairing your credit, check out a program through nfcc.org, who not only helps repair credit, but can also provide low interest mortgage payments.

Saving Money in the Long Run

It’s not in your lenders best interest to let you know that you can save literally thousands of dollars over the lifetime of your mortgage by making extra payments each year. It’s easier for most people to pay an extra $100 or $200 bucks a month, but you can pretty much do what works best for you. You might consider putting any return back on your taxes into the mortgage, that way it might not sting as much. You’ll be surprised to find that by doing this you can shave 7 to 10 years off the life of your mortgage.

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