Introduction
Most people who purchase homes and trailers have to get a mortgage from a bank first in order to do so. The loan will pay for between 80 to 90% of the price tag and your down payment will be needed to pay for the remainder. Once you have a loan to pay for homes and trailers you will have to pay it plus the interest back to the bank on a monthly basis in the form of a mortgage payment. This is why it’s important to make sure that you only get a mortgage if you have a steady, reliable income. Otherwise you may find yourself defaulting on it since you won’t be able to manage the monthly payments. There are also some tips that you should keep in mind to ensure that you choose the best mortgage possible.
Step 1
Select the mortgage that is best for the financial situation that you find yourself in. In order to do this you must look at your income’s stability, how much your monthly expenses cost and any future expenses that you may incur (i.e. weddings, children’s future education). At the same time you also need to learn the differences between fixed and adjustable interest rates. With a fixed rate mortgage your interest rate will never change for the 15 to 30 year period of the loan. However, you’ll pay between 25 to 30% more for a 15-year mortgage but you’ll also get a lower interest rate. On the other hand, with a fixed rate mortgage you will be stuck with a high interest rate unless you go ahead and refinance.
Step 2
Understand that an adjustable rate mortgage’s interest rate will change over time depending upon the market. Initially, the interest rate will be low for a few years. This is why they make sense whenever you are only purchasing homes and trailers to live in for 6 or 7 years. Otherwise you’ll want to avoid this type of mortgage, especially if your payments are going to amount to more than your income, because in the end you may wind up losing your homes and trailers.
Step 3
You need to pay attention to the points (fees paid to the lender up front during the loan’s closing) on a fixed rate mortgage. Each point is a percentage of the loan. Therefore, you need to compare the various mortgages for homes and trailers right away. The best deal will probably come from mortgage bankers instead of large banks. If there aren’t any points, be careful because there’s probably a higher interest rate.
Step 4
You’ll get the best deal on homes and trailers through a mortgage broker. They’ll take between .5 and 1% cut on your loan though so make sure to check out his references first. This is important because you don’t want a broker who’s only interested in getting his commission.
Step 5
Your approval chances for getting homes and trailers will increase as your debt decreases. This is because most banks don’t want to deal with people who have bad credit as they’re seen as a financial risk. For this reason, you’ll either want to clean up any debt you owe or put down large down payments (30% or more) on homes and trailers. If you still have trouble getting approved for homes and trailers, ask someone with good credit to co-sign for you. By having them on your loan you will make your credit look better, which will make you look more responsible. However, if you fail to pay your mortgage on time, the person who co-signs for you will be held responsible and may have their credit damaged so be careful with this.
Tips
It is important to take the time to learn about the different types of mortgages that exist and decide which is best for you.
Sources and Citations
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