Shopping for a Mortgage: Making It Easy
By Gina PogolMortgage Credit Problems Columnist
Marrianne Asks: Dear Gina, I have never bought a house before and have never had a mortgage. It seems like getting a good loan is a scary process if you have never done it. And I'm not sure, but I think I might have bad credit. I had a credit card with an old boyfriend and I don't think he paid it when we broke up.
Gina Says:
Dear Marrianne,
First, stop being scared. Before you go looking for loans in all the wrong places, you need to know what your credit really is. You might not even have bad credit. You might not have ANY credit. But if you don't have much, your lender can use a company to build one for you--with rent, utility payments, and other records. And if there are mistakes, they can be fixed. So start there and don't despair!
Shopping for mortgage loans could be compared to shopping for shoes. And if you are like almost every woman I know, you're a pro at that. So approach it the same way--seriously.
- First, consider your lifestyle. A lawyer wouldn't want to go to work every day in six-inch silver sandals. Similarly, a home buyer with lower earnings now but high potential income should consider adjustable rate mortgage (ARM) loans--and take advantage of the initial lower interest rates and payments that come with them.
- Second, make sure that your shoe fits. If you carry a lot of debt, a high mortgage payment that squeezes your entire budget can make you as uncomfortable as a tight pair of pumps. You will grow to hate it.
- Finally, don't pay any more for those shoes than you have to. And you want the best deal you can get on your mortgage too. Shopping online is a fast, easy way to compare lenders and programs, obtain quotes on interest rates, calculate your debt-to-income ratios, and see that you get the best-fitting loan for your lifestyle at a fair price.
If you think of mortgage loan shopping as a process that is no more intimidating than buying shoes, you'll be a lot more comfortable. And with today's online tools, loan shopping is probably easier than shoe shopping. Thanks for writing and good luck!
Gina
About the Author
Gina Pogol has over a decade of mortgage lending experience, in addition to practice as a paralegal for a bankruptcy attorney, and as a business credit consultant for Experian. She is also certified to underwrite Fannie Mae loans. She earned her BS in Financial Management from the University of Nevada.
All information provided “as is” for informational purposes only, and is not financial advice. MortgageCreditProblems.com, its affiliates, and any of the independent providers of information on this site shall have no liability for any informational errors or incompleteness, or for any actions taken in reliance on information contained herein.
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