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Applying for a mortgage is not something that you should do without getting professional counsel first. This is because a mortgage is a credit facility involving a significant amount of money. A simple mistake can be incredibly costly in the long run. Ideally, prospective home buyers should consult a mortgage broker to ensure they find the best possible mortgage on the market. In California, property prices are among the highest in the country, so consumers should not take the risk of committing themselves without getting California mortgage tips from competent financial experts. The following are some tips to help you out when buying a home in the state.
i) Choose State-Licensed Mortgage Companies
Mortgage lenders are required by law to register and seek a license from the state to offer mortgages to local residents. It is important you choose a firm that is duly registered and licensed to ensure you get a product that complies with the laws of the state. This will also allow you to get tax benefits on the interest you're paying towards the mortgage among other things.
ii) Make a 20% Downpayment
Private mortgage insurance, or PMI, is usually expensive and may increase your monthly payments significantly. If you make a downpayment of less than 20%, you will be required to buy private mortgage insurance. The best way, therefore, for ensuring your mortgage is more affordable is to save up to buy a house and contributing at least 20% towards the purchase. Most companies may even choose to lower your mortgage rate because their risk is reduced by 20%.
iii) Choose the Right Time to Apply
There is a popular saying that there is never a right time to do anything. When it comes to applying for a mortgage, however, timing is everything. This is because there are many factors affecting mortgage rates. These include; changes in government policies, current economic conditions, your credit rating and state of the real estate market among other things. It is important you wait until all these factors favor you before making a move. Since you cannot control most of these factors, you should concentrate on building your credit, because you have complete control over that. Pay your credit card bill on time and never miss or delay a payment for your personal loans. Once you have built your credit rating, you can wait for all the other factors to fall into place. You can get more info about it on this site.
iv) Refinance
Things change with time. For instance, the mortgage you took to buy your California home may have become too expensive for you to pay. This could be due to a higher rate of interest or increased financial commitments. Refinancing will allow you to alter the terms and conditions of the mortgage to make it easier for you to service. You can also refinance to fix the interest rate or to get a loan for other purposes.
v) Consult a Private Mortgage Adviser
There are many private mortgage advisers in California, so you can always get a second opinion on the advise you get from a mortgage company. By consulting a private mortgage adviser, you can get unbiased opinion on the best mortgages in the state. This will help you to make a well-informed decision.