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Getting the best home mortgage is important if you are in the market for a new home. The mortgage that you find plays a big role in the financial obligation of owning a home. The purchase price is only part of the equation. The interest rate, closing costs and monthly payment will all play a big factor in being able to afford a home. Therefore, you need to do the best that you can to find the best home mortgage available to you. Here are a few important factors that you should keep in mind when shopping for a mortgage:
1. Your Credit History
One of the biggest factors in being able to get the best mortgage is your credit history. Lenders will look at your credit score before they consider any other factors. Therefore, if you have a good credit score, you should be able to get a solid mortgage. Your credit score is a compilation of your entire credit history. It tells lenders whether or not you make your payments on time, how much debt you have, and whether or not you would be a good borrower. As a potential buyer, you should get a copy of your credit report and do everything that you can to increase your score.
2. Market
If you want to make sure that you get the best home mortgage that you can get, you need to time it right. The market plays a huge role in determining what you can get. The interest rate that is in the market determines what kind of interest rate that you can get on an individual basis. No matter how good your credit is, you cannot get a lower interest rate than what they have in the market at the time. This means that you need to watch the market in the time leading up to your home purchase and make sure that you strike when the timing is right.
3. Income Level
Your income will also have a role in the quality of mortgage that you get. The more money you make, the more comfortable lenders feel in lending you money. They have certain debt to income ratios that have to be fulfilled in order to give you a loan. If your income is substantially higher than your debts, you will be able to get a good mortgage product. A lender will add up your debt, including the proposed housing expense, and divide it into your income to determine whether or not you are eligible.
4. Lender
The lender also plays a major role in the quality of the mortgage. Some lenders just have better rates than others. The level of customer service is also important as you start to work with someone. You want someone that is going to treat you with respect. If you have a problem, they will help you out in whatever way they can. Lenders also have different amounts that they charge for closing costs. The closing costs can amount to several thousand dollars. Therefore, you will want to make sure that you get the best deal on them when you can.
