Are you currently preparing to buy a home?
Or do you want to maximize your money during a refinance on your current home?
We had our last five children in only seven years and while they were little, we moved eleven times in thirteen years.
We used to let the kids play in the boxes, until one day when we almost taped up a three year old in a wardrobe box.
He thought it was funny, but his mama was mortified! From that point on, we let a friend babysit the herd on packing day!
When we finally settled in one place long enough to purchase a home, we were delighted—until we realized how much we didn’t know about home mortgages.
Here are 6 home mortgage tips on how to maximize your money on your loan:
1. Make On Time Debt Payments
Every 30-, 60- or 90-day delinquency on a loan or credit card is going to reduce the credit score on your report.
This is a consideration that loan officers will have to take into account when approving your home mortgage and the amount of the loan.
2. If You Have to Miss Something
In an effort to “hope for the best, but plan for the worst” be strategic in how you pay your bills.
For example, for military families if your COLA (Cost of Living Allowance) check doesn’t catch up with you, military finance doesn’t come through on time, or you find that you are going to have to miss a loan payment of some kind, then be strategic in choosing that missed payment.
You should miss the credit card payment first, followed by the payment on any installment loan you might have and finally the payment for an existing home mortgage.
3. Pay off Debt
It’s important to pay off as many smaller debts as you can so that you’ll have a better chance at getting a good home mortgage rate.
You may end up putting down a smaller amount at closing, but you’ll be better off than the high interest rates of most consumer debt.
If you are refinancing a home, it’s important to minimize how much you owe overall.
4. Mortgage Takes Priority
If you or your spouse has a new job and the means to secure multiple loans (such as a home mortgage, new car and new credit cards), then secure the mortgage loan first.
Whenever your credit is scored, each application for credit becomes a liability to your rating.
Numerous credit inquiries can hurt your overall credit score, especially if they are filed in the months prior to the mortgage loan review process.
5. Save, Save, Save
It is best to increase the size of the down payment you’re able to make by saving as much as possible.
6. Do Ask for your HUD-1 A Day Early
Federal law requires lenders to give mortgage applicants a copy of their settlement form at least one day before closing, but many won’t give it unless you ask for it. Compare the HUD-1 with your GFE (good faith estimate) and bring any errors to your lender’s attention.
Have you ever refinanced your home for better rates? Let us know in the comments.