(PRWEB) September 25, 2012
Mortgage rates continue to drop for a second straight week, with the benchmark rate on 30-year fixed mortgage slipping down to 3.55 percent, according to the weekly survey on Sep 13th from Freddie Mac, a government sponsored enterprise. With such low mortgage rates today, more and more potential home buyers can’t wait to get into a new house. To help American homebuyers get the best deal of the mortgage, mortgage specialists from Mortgage Hands, the leading mortgage company in the United States, have listed some of those mortgage myths as well as the truths on how the buyers can avoid these traps.
Bad credit report prevent a mortgage
The credit report plays a main part in deciding the interest rate and the type of the mortgage one can be offered on the home loans. Having a good credit report can certainly ensure home buyers to get the best interest rates. But having a bad credit record doesn’t mean that you cannot get a mortgage loan. The lender will consider the homebuyers with poor credit record a greater risk and charge higher interest rates. “Having a good credit history is certainly important, but if you have a bad record, make sure you tell all the history record to your lender,” said Mortgage Hands experts, “Do not let them find out your bad credit report when they do the credit search personally.”
The lowest interest rate mortgage is the best
Many homebuyers judge the mortgage loans simply by the interest rate, which is totally a big mistake. If borrowers make their decision by just seeing the low interest rate, it may turn out that they will pay extra tens of thousands dollars. What really helps homebuyers understand the real costs of a mortgage is the comparison rate that most borrowers usually don’t look at but they must. Read the contract about your mortgage to understand the details of the fees and charges you will need to pay.
Borrow more from the lender if you can pay off your credit card
Many home buyers have the conception that if they pay off their credit card, they are able to borrow more from the lenders. Wrong! Even if a borrower owes nothing on his credit card, his credit card limit will also be counted to his borrowing money. “The limit of the credit card plays a large part in affecting the maximum borrowing money,” Mortgage Hands specialists explained, “For this reason, to apply for the best mortgage loan, borrowers should try to reduce their limit or cancel the credit cards that they are not using currently,” they said.
Pre-approved mortgages are much guaranteed
Mortgage Hands said that it is totally wrong that pre-approved mortgages can guarantee pretty much money. Pre-approval is an evaluation of the money that the lender will lend to you based on the property value. The evaluation usually needs to be piled up and a final approval will be provided to the borrowers.
Using an offset account to cut the interest costs can be the best way
Many people would like to have their salaries paid into a mortgage offset account every month. But to an average income buyer, it seems not worth at all. “If someone has a mortgage for about $65,000, he will just save $20 on the monthly interest,” illustrated by a mortgage expert from Mortgage Hands, “And he may just save $14,000 over the lifetime of the loan.” Other than using an offset account, there are many other great ways to cut down the interest costs, fortnightly payments for example.
To get the best mortgage when purchasing a house, it is advisable to get a good understanding of the current mortgage industry. You can learn more by searching the internet to browse some articles, tips and home loan options about mortgage. And also, if you are not free, getting professional mortgage services from a reputable mortgage company can be a good idea. But remember that learning some mortgage tips can never be overlooked.