10 tips to help you get the best mortgage

So you’re looking for the best mortgage terms known to humankind. Well, chances are, you won’t find them. Or, even if you do, trust that the search won’t be easy. You will need to do a lot of looking to find rates that are even halfway decent. Often, what happens is this: you end up paying more for the interest than for the full amount of the principal or the loan itself.

Don’t dig yourself into that trap. Here are some of the best mortgage tips to cut down on your expenses.

1. Supposing all the terms are equal, choose the bank that provides you the lowest spread in interest formula. This results in smaller interest expenses.

2. Pick a fixed rate for the rest of your loan’s life. Do this only after you have found a rate you’re comfortable with. With a fixed rate, you won’t have to worry about ugly surprises or shocking increases down the line.

3. If you feel it’s better to get a loan with an adjustable rate, be sure to reprice quarterly. However, be sure to do this only if you believe the rates will drop lower in the short term and if your bank is offering a rate cap.

4. Increase either your down payment or your equity so you borrow very little. However, if you can invest more at a higher rate, go ahead and put down the smallest equity possible.

5. Lower your interest expenses by shortening your loan term.

6. Go with a declining-balance amortization schedule. The best mortgage experts in the business say this will help you pay lesser interest in the long haul.

7. Pay every two weeks. This may seem tedious to you but there’s a reason for it: it lets you pay off the loan quicker and lets you save on interest in the long run. Or, you can make pre-payments on the principal; this lowers your total interest expense.

8. Consider refinancing the loan if the rates drop. There is a right time and a wrong time to refinance. However, given that rates are lower now than they ever were, it makes a lot of sense to refinance while you can, when you can.

9. Negotiate for some fees to be waived. You may think it’s possible to get some of the settlement fees to be waived but it’s not. Just ask; you will be surprised what a few questions here and there can do.

10. Shop around. You will never find the best mortgage if you do not shop around. Different groups offer different terms. Here’s an insider’s tip to getting your bank to offer you lower interest rates: get the bank to consider the business relationship you have. If you have significant deposits, for example, they just might reduce the interest you need to pay.

There are mortgages, and there are mortgages. Why settle for anything less than the best? Use these 

10 tips to help you get the best mortgage. You won’t be sorry once your wallet starts feeling the difference.

By  Eric  Smith