The Right Home Mortgage Advisor Can Save You Thousands

by Dean Weber

If you are in the market for a home mortgage, it's time to start doing your homework. If you don't already know it, things have changed in the last couple of years and the days of easy home mortgages are gone.

During the real estate boom of the last few years prices were rising like crazy and mortgage money was easy to come by. But as things started cooling off most banks and lending institutions began to tighten their lending practices.

The interest rate hikes that have taken place over the last few months are quite important for prospective new home owners. If you are new to the real estate market you may not appreciate how important low interest rates are to the affordability of homes. On a large home mortgage even a small change in the interest rate can make a very big difference to your payment.

In fact the interest rate of a home mortgage is usually what determines how much you can borrow. That means it is the interest rate that often dictates how much you can spend on a home. The reason is simple. When you apply for a home mortgage the lender determines what monthly paymentyou can afford. And since a large part of each payment is simply interest, a higher interest rate could easily put the payment out of reach.

**The importance of your home mortgage advisor**

One of the first things you should do before making home mortgage decisions is to find a professional advisor who has a lot of experience in the home mortgage business. Look for an advisor who has in-depth and current knowledge of real estate and mortgage trends and can make use of many different sources of mortgage funds.

Often your best choice will not be your regular banker. Banks almost always recommend their own products and are not very interested in suggesting other products - even if they are a better deal for you.

Think about it this way - if your credit rating is good and you have a good steady income there are lots of lenders out there eager to give you a home mortgage. So you can probably get a better deal than the one your bank is offering. On the other hand, if you don't have a particularly good credit rating or have cash flow problems you may need some creative suggestions. But your bank is not likely to give them to you. They want you to follow their rules and mee their requirements.

In other words, a bank is fine if you don't care about getting a better deal. However, if you want lower cost or more flexible alternatives or you need creative suggestions you're better to go somewhere other than your bank.

The altenative is to find a home mortgage advisor who knows the market inside out and who has access to many different solutions from many different sources.

**Good deals are still available**

Even in these times of tighter credit there are ways for people to get a good rate on a home mortgage. Often these good rates involve various government backed loans such as FHA loans. These loans allow people with even horrible credit to borrow as much as 97 percent of the value of their home - as long as they have the necessary income to make regular payments.

Home mortgages like these make home ownership possible for many people who might not otherwise qualify. So they are very good deals for many people. But many traditional lenders will not recommend them because there is not enough profit in it for them. Some traditional lenders are not even aware these alternatives exist.

In fact Even many mortgage brokers will not recommend these loans because they involve some extra work. However, from the borrower's point of view it is worth finding a mortgage broker who will put together the best deal for you. It could make an otherwise impossible mortgage a reality, and it could save you literally thousands of dollars over the life of your mortgage.

**An ARM works for some people** Another mortgage possibility is called the 'option adustable rate loan' - commonly referred to as an ARM. Many people took advantage of this approach in the most recent real estate boom. If you qualify you could pay as little as 1% interest against a 'real' rate of about 7.25%. To qualify you need a very good credit rating and good prospects for the future.

But you must be careful with plans like this. The unpaid interest is added to the principal of your loan, so the amount you owe is actually increasing. Eventually you will have to start making payments against the increased principal amount. So your payments will no doubt be higher than they otherwise would have been. After two or three years your payments could end up being more than you can afford to pay.

But what an ARM does is it creates the opportunity for a borrower to make much lower payments for a short period of time. Its most popular use is for people who have short term cash flow problems, or when borrowers see their financial situation improving in a year or two.

**The right mortgage makes a difference**

While these days qualifying for a home mortgage is more difficult, and affording a home mortgage is more expensive, there are still ways to save money - especially when your advisor can bargain between a number of different money sources. To find these deals it is very important to find those sources. That is why it is so important to deal with an experienced professional advisor you can trust. This person will have in-depth knowledge of the current home mortgage situation and be experienced in dealing with situations like yours.

The best advisor is a broker with a great deal of experience and many different lenders to draw on. That kind of broker can find an affordable home mortgage for almost everyone.

Dean Weber has more than two decades experience as a home mortgage advisor, arranging commercial mortgages and all types of loans. Check out these mortgage client testimonials to see how much actual home owners appreciate Mortgages-Mall.com You can get a unique content version of this article.