Before putting all you money into mortgage payments, please consider the following 9 important issues. By considering these important financial issues, you will be able to make your payments work much harder for you.
 

1. Get pre-approved BEFORE you look for your new home
Of all the steps to de before you buy a home, the pre-approval part is the easiest. One of it's benefits: It will give you complete peace-of-mind while you are looking for a home. The best part, it's usually free. Your local lending institution can give you a written pre-approval with no obligation on your part. Getting pre-approved means money in the bank! Being pre-approved means that you have a guarantee of obtaining a mortgage up to a specified level.

2. Know what level of monthly payment are you comfortable with
When your are discussing your pre-approved mortgage with your lender or your lending institution, you will find out up to which level you can borrow. You must also pre-assess what amount of dollars you want to spend each month on your home without getting uncomfortable. Your financial situation could give you a higher level of pre-approval than what you could feel comfortable paying each month. Once you have set that amount, you will know the price range of the house that you should be looking for.

3. Select the type of mortgage that will best suit you
Before you commit to a certain type of mortgage, there are a number of questions you should be asking yourself. Mainly: For how long do you thing you will own your present house? Are the interest rates going down or up? Will your earnings change in the near future, will that change have any influence on your future payments? Once you know the answer to these questions, you should be in a better position in choosing the appropriate type of mortgage you should be looking for.

4. Payment frequency options
Accelerated weekly and bi-weekly periodic payments can save you thousands of dollars in interests payments. If you plan your mortgage periodic payments well, you will significantly lessen the amount of interest that you will be charged over the term of the loan.
The best trick is the accelerated bi-weekly mortgage payment system. You pay every second week half the amount of what should have been your monthly mortgage payments. By using this system, at the end of the year you will have paid the equivalent of 13 monthly payments.
Note: Not all mortgages are of the accelerated bi-weekly type.

5. Authorized pre-payment
Another system that can greatly reduce the total interest amount you will have to pay is the authorized pre-payment system. By paying off a certain percentage of your mortgage, or by increasing the amount that you pay monthly will greatly reduce your mortgage costs. By using an authorized pre-payment system you can have a major impact on the number of years you will have to pay your mortgage.
Note: Not every mortgage has the prepayment option built in.

6. Portable mortgage
A portable mortgage permits you to use the same mortgage when you purchase your next property. Basically, under certain conditions, the lender will authorize you to change home mortgages without any penalties and without having to go through the entire mortgage process again.

7. Assumable mortgage
An assumable mortgage is a mortgage that you can transfer to the buyer of your house. It is a very rare type of mortgage, but a very powerful selling point for your buyer. Furthermore, this type of mortgage comes without any penalties if it is assumed.

8. Work with a financial expert
Before you choose your mortgage type, the lender or the lending institution, get the insight of a professional. Ask a mortgage specialist. A mortgage specialist will usually answer your questions at no cost or obligation and, if you do use his or her services, you will probably get your mortgage faster and with better conditions than if you didn't.

9. It's usually better to choose a good house instead of a good deal
Here is an example. In 2004, two houses were sold. One for $320,000 and the other for $610,000. One was at a major road and the other one, not far from it, in a reasonably quiet street. Both houses were purchased by respective owners around 1982. The one at a major road was paid around $70,000 while the other was paid around $90,000. The owner of the later home not only got higher appreciation from his house, he also enjoyed a quieter life for 22 years.



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