Mortgage loans normally are the biggest investment a consumer is likely to make. The payments can easily be over a thousand a month, and the terms are normally 20 to 30 years in length. Making the right decisions regarding a mortgage is crucial to any person or families economic success. So let’s discuss them in more detail.
Mortgage Loans are Very Expensive
It is going to be expensive to buy a new home, but there are a few different ways that you can save money on mortgage loans. In some cases, you can cut thousands of dollars off of the price of the house that you want. This money can translate into months or even years of mortgage payments. Saving money in this fashion is a great way to reduce debt before you even have any debt. You should look into every tactic that you can so that you can create your own maximum savings. I spoke to a good friend John Moel of Broker House Lending and he shared some tips that I will impart to you here that can and will save you a considerable amount of time, money, and possibly even effort. Another great source of information regarding the process can be found at Wiki. Knowledge is power so get all you can.
Ask for Assistance with Closing Costs
Most sellers are eager to get a deal in place. The longer that someone owns a house that they are not using, the more they have to pay for it, mortgage loans are in effect till the seller sells. If they are paying one thousand dollars a month for the home, they will waste six thousand dollars if they refuse to sell to someone who will not give them all of the money that they want. For this reason, sellers will often spend a bit of money to get the deal done a few months sooner, knowing that they are going to net more money in the end.
With this concept in mind, you can ask them to pay some of the closing costs. These costs are brought about by the legal aspects of the sale. You have to pay the mortgage company, the title company, the initial home insurance payment, and many other fees. If you agree to give the seller the asking price, you can then stipulate that the seller needs to cover these fees. He or she will have to bring a few thousand dollars to closing. You will not have to pay nearly as much up front.
Do Not Use a Real Estate Agent
When two real estate agents work together to sell a house, one on the side of the buyer and one on the side of the seller, they will be given eight percent of the total sale price including any mortgage loans. They will then split this price in half so that each of them gets four percent. If you decide to buy the house without an agent, doing all of the work on your own, the selling agent will get the full eight percent. You can then ask him to put two or three percent toward the cost of the house. He will be glad to add his money to the sale because he will still get one or two percent more than his normal commission. He will want you to buy the home instead of another buyer who has his own agent.
Negotiate for a Better Price
You should never simply agree to the asking price that the seller has set up when he or she put the house on the market, a lot can be saved on mortgage loans by just negotiating. Do not make the mistake of thinking in the same mindset that you would use in a store. The price of a house is never firm. In fact, the price gets less firm as time goes by. If a home has only been on the market for three days and you decide to make an offer, the seller will think that there is a lot of interest, and he will not lower his price. If the house has been on the market for six months without an offer, he will be glad to lower the price just to make the sale. Remember, he has to pay his own mortgage on the building every month that he cannot sell it. You can use this situation to your advantage.
Buy Your New Home for Less
If you do all of the things listed above, you can save thousands of dollars on mortgage loans. These savings may be applied to the initial payments, or they may be applied to the mortgage loans themselves. Either way, you will be very happy that you took the time to get to the best price, rather than just taking the price that the seller originally said that he wanted.
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