Here are some points to ponder when thinking about a mortgage.  We suggest you consider them while looking for a mortgage.

¨ No simple qualifying formula can even begin to accurately tell you ‘how much home you can afford’ or more importantly, ‘ how much home you should buy’.

¨ Conventional wisdom holds that the all-powerful national mortgage companies, Fannie Mae and Freddie Mac, set underwriting standards for the mortgage lending industry.  In fact, though, Fannie and Freddie buy only about one-half the mortgages issued throughout the country.

¨ Savvy loan reps, though, will do a ‘first review’ with you and then, if desirable, suggest ways that you can improve your financial profile.

¨ You most certainly should shop for your financing and compare interest rates and other costs; however, dialing for dollars to find the best rate on a 30-year fixed-rate mortgage (as most borrowers do) won’t likely achieve this objective.”  Further:  “No loan rep can know the interest rate a lender will charge you until after you’ve submitted your application for a loan.”  Even further:  “These loan reps who do offer you a lowball rate quote are probably setting you up for bait and switch or…”  Finally: “ …,unless you’ve let more than a few bills slip by unpaid, or suffered some other qualifying difficulties…, rarely will shopping among lenders net you a one-half percent lower rate”.

¨ Experience shows that throughout most of the past 25 years, those borrowers who have chosen ARMs have paid less total interest for the same amounts borrowed than their 30-year contemporaries.

¨ APR tells you nothing about ARMs – and very little about fixed-rates.

¨ Credit scores:  720+ = great, 660 to 720 = best terms will be tougher, below 620 = subprime & hassles”  “75% of Americans fall within 600 to 800.

¨ If your credit file data include errors, as do at least 30% of all files, your credit scores will also err.

¨ Credit repair firms can’t fix your credit or boost your credit scores.

¨ So, who can you trust?  Trust those professionals whose behavior and demonstrated competence leave no doubt about their motives.  Trust those who adopt your goals as their own – and then exercise the diligence and expertise to help you achieve them.

¨ Considering the hundreds of thousands of dollars (or more) that individuals and families devote to home buying and home financing, Americans do need to learn how to manage these sums more carefully.  Smart housing and home finance decisions today and continuing throughout your life will pay returns far larger than anything the great majority of Americans could ever expect to see from stocks, bonds, or other investments.

¨ You may be able to refinance profitably even if your rate drops by just .50 percent.  To answer the refinance question, always calculate.

Points To

Ponder