mortagesandforeclosures

by Kim Hughes

These days, foreclosure is rife in the US. Last year over 2 million of these took place and this is why it is wise to save as much as possible on a mortgage loan. There is nothing wrong with owning a home and no one should be afraid to take this step, but getting a mortgage is probably the single biggest investment you will ever make. In this article, we'll look at ways to protect that investment..

It is very rare that anyone buying property is able to purchase it outright. Virtually every home owner has to make use of a mortgage loan to facilitate this purchase. A mortgage loan is a long term loan, which stays in place for as little as 15 and as much as 30 years. Savings on these long-term loans add up substantially in the long run.

Saving money on your mortgage is important to successful home ownership. Never buy a property if you don't intend to live in it for at least 3 years or longer. Moving and selling a house has a whole load of expenses attached to it and you shouldn't be doing this every few years. Your property has to appreciate at least 15% to make money, and this rarely happens in so short a time as three years.

Make sure you pay attention to your finances before even applying for a mortgage loan. This means seeing what you can afford, paying off high interest rate credit cards and other loans, and checking your credit report to dispute erroneous records. Pay all your bills on time in the period preceding your mortgage loan application as this reflects well on your credit report. The better the credit report the more chance the home buyer has of receiving a low interest rate.

Avoid taking out interest only loans and remember that sooner is not necessarily better. A 15 year mortgage is a short time to pay off a home loan, and the interest will definitely be higher as will the repayments. 30 year mortgages have lower interest rates and lower repayments which makes them more easy to afford.

About the Author:

Kim writes about financial matters and real estate. She also writes in Dutch about huis verkopen maastricht and makelaar maastricht.

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