In spite of the recent recession, real estate prices are still somewhat inflated. New buyers must be especially careful to take advantage of all opportunities when looking for real estate, especially with bad credit. Here are 10 mortgage loan basic tips that you can use to get the best mortgage for the least amount of money.
Expect to Negotiate With Many Lenders
With bad credit, you need to create leverage for yourself through volume. The more people that you talk to, the better deal that you will get, especially if mortgage lenders know that they have to compete for your business. Read more about mortgage http://www.jobs4uinkent.com/home-mortgage-rates-for-the-first-buyer/
Expect A Higher Down Payment
in order to give yourself leverage with bad credit, come to the table with as large of a lump sum as you can. This will turn things more in your favor.
Go Outside of Your Local Area for the Best Interest Rate
If you stay within your local area, lenders will not think that they have to offer you a better interest rate than is listed on the computer that they are reading off of. Go as far as you need to in order to get competition.
Try to Budget More Than the Minimum Monthly Payment
Even if you are not able to obtain an interest rate that is to liking, you can forgo overpaying for real estate by paying the loan down more quickly.
Make Sure There Are No Prepayment Penalties in the Contract
This is its own tip, but it is also an addendum to the tip above. Make sure that you are not penalized for paying more every month. Some bankers like to sneak this into a contract in order to solidify their profit margin.
Have a Cosigner Handy
You may not be able to get the loan that you need without a cosigner, so have one ready, preferably one with better credit.
Call in Favors
If you have a relationship with a bank or with an individual banker, now is the time to remind them about all of the good business that you have done with them. Whether they say this or not, bankers always have leverage to help you out a bit on a purchase as big as real estate.
Walk in the Door with Research Completed
There are plenty of public statistics and free calculators on the Internet that can help you determine a fair price for real estate. You have access to all of the information that the bankers do. Make sure that you use it.
Fix Your Credit Score
The three major credit rating agencies are known for making mistakes. Fix all of those mistakes before you walk into a banking office.
Be Ready to Walk Away
Bad credit does not mean that you have to accept any deal that a banker gives you. If your research is solid, you can turn the tables. Do not be afraid to stop the negotiation if a bank is hardlining you.