Top Ten Tools For Borrowers

• Before you get a mortgage, be sure you understand your personal financial situation. The amount of money a banker is willing to lend you is not necessarily the amount you can "afford" to borrow given your financial goals and current situation.
  
  
• Understanding how lenders evaluate your creditworthiness will maximize your chances for getting the mortgage you want the first time you apply and keep you from wasting time and money on loans which end up rejected. Most obstacles to mortgage qualification can and should be overcome prior to submitting a loan application.
  
  
• The ocean of mortgage programs is bordered with reefs of jargon. Learn loan lingo before you begin the mortgage shopping voyage to ensure that you hook the best loan and to minimize your chances of being taken by loan sharks.
  
  
• To select the best type of fixed-rate or adjustable-rate mortgage for your situation, clarify two important issues. How long do you expect to keep the loan? How much financial risk are you able to accept?
  
  
• Special situation loans - such as a home equity loan or 80-10-10 financing could be just what you need. However, some "special" loans such as 125 percent loans and balloon loans, can be toxic.
  
  
• Whether you do it yourself or hire a mortgage broker to shop for you, canvas a variety of lenders when seeking the best mortgage. Be sure to shop not only for a low cost loan but also for lenders that provide a high level of service.
  
  
• To compare various lenders' mortgage programs, you must understand the myriad costs and features associated with each loan. To help you keep score and do a fair comparison, we provide helpful worksheets in the book.
  
  
• Just as preparing a compelling resume is the first step to securing a job you want, crafting a positive, truthful mortgage application is key to getting the loan you want.
  
  
• Refinancing - that is obtaining a new mortgage to replace an existing one can save you big money. After you get a purchase mortgage, stay informed about interest rates since a drop in rates could provide a money saving opportunity. Assess how long it will take you to recoup your out-of-pocket refinance costs.
  
  
• Prepaying your mortgage - that is, making larger than required monthly loan payments to payoff your mortgage faster - may or may not make sense depending upon your personal and financial circumstances.