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Money Saving Mortgage Tips

The rate for a 30 year fixed rate conforming loan is running at the lowest average annual mortgage rate in 40 years. Pretty good, indeed. Nonetheless, home buyers are always looking for the best rate they can get. And they should. Here are some tips that will help you get the right mortgage, at the right price, and at the right time.

HOW LONG DO YOU EXPECT TO BE IN THE HOUSE? When you start shopping, take a look at how long you expect to be in the house, or have that particular mortgage. Maybe you expect to move up after you've built some equity in the house. Maybe you plan to refinance in a couple of years to pull out some equity to help pay for college tuition, or a new car.

Think beyond the 30-year, fixed-rate loan. "It's the most expensive option". Most people purchase this type of loan for stability and never use more than a few years of the loan. Why pay for a part of the yield curve that you may never use because you either sell the property or refinance the existing loan. 

SHOP AROUND FOR A MORTGAGE LOAN BEFORE YOU ACTUALLY NEED ONE. Unfortunately, it is human nature to shop for a home, fall in love with it, make an offer, and get an offer accepted-all before you consider a mortgage. Give yourself some time to shop intelligently, for the right mortgage with your credit union. Then you'll know what you can really afford (it might be more than you think), and what financing options you might be able to utilize if you need them.

DON'T POSTPONE BUYING A HOME. Over the years home ownership has been very lucrative. The worth of housing has been running at about double the rate of inflation over the past six years. Plus, every year homes get a little harder to build. Regulations, development fees, assessment districts all add to the time and cost of building a new home. And they're not making any more land. Now is the time to see your credit union and buy the home you deserve.