Decisions that Affect Your Long-Term Financial Picture

Decisions that Affect Your Long-Term Financial Picture

Decision on home purchase is one of the most important financial decisions that a person or a family makes in their life. There are numerous factors that have to be considered when applying for a mortgage. There are numerous programs available on the market currently and it is very important not to make a fatal mistake when choosing the one that is right for your personal situation.

The first thing that you have to do is to get a qualified mortgage consultant, who you discuss your long-term plans with and who is going to help you through out the process of getting the loan.

Some curious home buyers visit Internet websites to get familiarized with current interest rates. But those are very approximate since a faceless website doesn’t know what your future plans are or what your current situation is. There are also many nuances to the loan process that significantly affect the interest rate. Basically, websites just want to attract you with low rates that are based on unrealistic time frames.

Sometimes a lender can offer you a very attractive interest rate with a 10-day lock in period. Be careful, because it is not likely that you will be able to find your dream home, get through the negotiation process and win approval from a lender within such a short period of time. This is called short-pricing; when the time comes to close the transaction, the rate that was originally offered becomes simply not available. In this case you are forced to accept another offer with higher interest rates.

However, an experienced and qualified loan originator with good reputation will ever do this to attract new customers, since his business is based upon referrals.

Once you‘ve found a mortgage consultant that you are comfortable with, explain all your future plans to him; they will have a very significant impact on the decision on which loan program you should apply for. For example, if don’t plan to stay in your house for a rather long period, say at least five years, it will not make a lot of financial sense to apply for a 30-year loan or to pay high closing costs to get a lower interest rate since you won’t be in the home long enough to benefit from these things.

Once you’ve had discussed all your plans and options with your mortgage consultant, he should be able to give you a rather short list of mortgage plans that suit your current situation. He should also explain you all advantages and disadvantages of every one of them or supply you with easy-to-read printed information that will do the same.

Home ownership imparts a rewarding vehicle for building wealth and a strong financial future. The mortgage consultant that you choose should be there not only when your loan closes, but should also provide you with ongoing service to assist you in managing that debt over time.

© 2010, Jericho Mortgage — Decisions that Affect Your Long-Term Financial Picture