If you are shopping for a home mortgage loan, then weighing the different choices available to you can save you thousands of dollars over the course of the loan. These choices generally include the loan type, length of the loan, your down payment, interest rate charged, fees, and lender selected. Of course, you don’t want to make a snap decision with your home purchase loan options as a lot of money could be riding on the line. Please read on for some tips on how you can save money on your next mortgage loan.

Get Informed

A little bit of research on your part can save you plenty of money on your next mortgage loan. If you plan on living in your home for the long term, then comparing the home purchase loans options available to you is essential to helping you save money.

Assuming that you qualify for and can afford home financing, you will find that the number of mortgage choices available to you are almost limitless. Your loan term can be for 15, 30, 40 even 50 years with some lenders offering 20 and 25 year term mortgages too.

Annual Percentage Rates are generally not that different from each other, although a savings of even just one quarter of one percent can result in a significant savings over the life of the loan.

Six Loan Types

The loan types, ultimately, can yield some of the biggest savings and generally fall under the following categories:

Fixed Rate Loans — The most popular mortgage lending option, a fixed rate loan means that your mortgage payment stays the same for the life of the loan. The amount you pay today will never change, but you will pay a slightly higher interest rate than the homeowner with a variable rate mortgage. Explore other options if you only plan on living in your home for the short term.

Adjustable or Variable Rate Loans — A lower rate and the ability to borrow more money are two of the chief reasons for homeowners to seek a loan with a variable interest rate. If you are planning to stay in your home for three years or less, than an adjustable rate mortgage is the best choice for you. On the other hand, long term homeowners may find that the constantly changing loan payments to be a source of uncertainty and discomfort.

Hybrid Loans — If you want the security of a fixed payment along with the lower cost of a variable rate loan, then a hybrid loan could be the best choice for you. With a hybrid loan, your interest rate stays fixed for a set number of years then adjusts yearly thereafter. Loans with a 5/1, 7/1 or 10/1 option means that they are fixed for the first 5, 7, or 10 years respectively and then adjust annually thereafter.

Interest Only Loans — Consumers seeking low monthly mortgage payments can turn to interest only loans to save money. With an interest only loan, your monthly payments reduce the amount of interest owed on the loan, but not the principle initially. For example, for the first five or seven years of the loan, the principle stays the same meaning that your $350,000 principle remains the same until the interest only time-frame has ended. The flip side of interest only loans is that you could lose money if your home’s value declines.

Minimum Payment Loans — The lowest monthly payment home mortgage loans are Minimum Payment Loans. Basically, you’ll make lower monthly payments for a certain length of time and afterwards pay a higher rate. Where housing prices are high, these types of loans have made homeownership a dream come true for consumers who might otherwise not be able to afford a home.

Zero Down Mortgages — In some cases, consumers can purchase a home with no money down. Typically government sponsored loans, zero down mortgages can be ideal for the consumer who cannot raise the capital to cover closing costs and the down payment. Variations of the zero down mortgage are those loans requiring 3 to up 20% down.

Get Empowered

Not every consumer is eligible for each loan type mentioned; restrictions apply and fees vary. Clearly, fully understanding the terms of your loan is important toward recognizing the advantages and disadvantages of your mortgage choice. An informed consumer is an empowered homeowner which is what you want to be when weighing your mortgage choices.

Tags: home purchase loans, mortgage lending, mortgage loans

You found the home you want and now comes the third step in the home buying process: negotiating the price you will pay for the home. Certainly, meeting the buyer’s asking price can take the edge off of the buying process but other factors will weigh in including market conditions. How you tackle this part of the home buying process could cost or save you thousands of dollars.

What Type Of Market Are You In?

What is going on in your local market? Is it a buyer’s market or a seller’s market? If you are in a buyer’s market you can offer less for the home than the seller’s price, but if you are in a seller’s market you may have to pay above the asking price especially if other parties are competing with you.

What’s In The Contract?

Your agent will provide you with a copy of the terms of the contract prior to you making your offer. You’ll want to acquaint yourself with all of the details to learn exactly what you are getting when purchasing the home.

Purchase price, terms of the sale, earnest monies required, financing contingencies, settlement and possession, a selling of your home contingency, home inspection, and termite inspection and environmental testings should all be noted. Your attorney will work on your behalf to make certain that your interests are protected.

Before Extending Your Offer

What are you getting with the home that you are buying? It should include all of the fixtures and just about everything that is nailed or bolted down. However, the refrigerator, washer/dryer, shed, outdoor furniture, window treatments and other items may be excluded, and could be pawns used in negotiating the final price.

Presenting Your Offer

Once you are satisfied that all of the previous steps have been accomplished, you can then present an offer based on the information on hand. You will present your offer to your real estate agent who will contact the seller’s agent. The seller’s agent will then contact the homeowner and present your offer to them.

The homeowner can respond to your offer in several different ways including:

• Accept your offer as is.
• Reject your offer outright.
• The seller could change the terms of the contract and present a counter-offer.
• You can then counter the counter-offer.
• The seller can entertain a second offer.

Once an agreeable purchase price has been reached then you are on your way to home ownership. Of course, one or more contingencies could kick in otherwise the acceptance of the contract makes it a legally binding document for both parties.

Negotiating a home purchase can be accomplished quickly provided that all of the contract conditions are worked out. Skilled real estate agents working closely with the buyer and seller can smooth out any rough patches and bring the negotiations to a successful and orderly conclusion.

Tags: buying a home, buyng home, home buy, Home Buying, home buying contract, home buying steps, Home Financing, home listings, home loans, mortgage, mortgage lending, negotiating home buying contract

There are all kinds of people out there who are willing to sell you your next home. Brokers, licensed realtors, a homeowner, your neighbor, or a friend are points of contact for buying a home. However, most buyers retain the services of a licensed realtor as they rightfully expect that this person knows the local market very well and will act in their best interests. Let’s take a look at some things to consider when choosing your real estate agent.

Questions Every Homeowner Should Ask Prospective Real Estate Agents

Who are you representing? Some realtors are agents for the seller, others act as agents for the buyer, while some are dual agents — representing the buyer and the seller equally. You will want to make sure that you receive at least partial representation. Of course, when the realtor shows you homes she has personally listed you will know that she is acting as a dual agent. Realtors are required by law to state in which capacity they are serving you.

What types of buyers do you represent? Some realtors specialize in high end homes while others enjoy working primarily with first time homebuyers. If you want to buy a condo and the agent works primarily with single family residences, will you feel comfortable enough to have this realtor represent you?

Where is your primary territory for buying and selling homes? If the agent’s office is in one town and the homes you are interested in are in the next town (or county) do they know that market well enough (i.e., neighborhood reports, home values, schools, businesses, etc.) to offer adequate representation to you?

Do you charge a fee? Real estate agents should never charge a fee for their services. When they sell you a home, they receive a portion of the seller’s commission. Business etiquette says that it is fine to send a “thank you” note to the realtor for the work that they do on your behalf and a small gift is not out of the question. What real estate agents really want from you is referrals for future business!

Do You Like Your Agent?

Of course, the one question you have to ask yourself about any real estate agent is this: do you like him or her? Oftentimes, it takes interviewing two or three agents before deciding which one you will work with. A good rapport, an understanding of your needs, and an agent who is truly interested in satisfying you is essential to a successful home buy. Without a good relationship you may find the home buying process to be a big disappointment.

Links To Empower You

Finally, the following resources can help you find the home you want while working with an agent:

• Search MLS
• Search FSBO
• Search Foreclosures
• Search New Homes
• 12-Step Mortgage Lending

Happy home shopping!

Tags: buying a home, buyng home, home buy, Home Buying, home buying steps, Home Financing, home listings, home loans, mortgage, mortgage lending