How Much Mortgage Can I Afford? Insider Tips About Mortgage Lenders

"How much mortgage can I afford?" is a question asked by many home buyers today, yet it is based on many unknown factors. Certain mortgage lenders will try to get the most money out of the new home buyer;therefore, it is your responsibility to know exactly what to look for in a loan officer or broker.

It is imperative that you are educated about the necessary steps to get the most from your lender as you are preparing to determine which lenders are honest and reputable. There are many lenders and mortgage brokers who are genuine and honest about their profession, but unfortunately we do not have any way of knowing this unless we become educated about the mortgage process. When you are shopping for mortgage quotes and lenders, try to remember these important tips:

1. Quick mortgage quotes may not be final.

Yes, quick quotes are helpful for you to determine an estimation of your monthly payment, but you must understand that this may not be the final mortgage quote. You should ask yourself these questions before you talk seriously with a mortgage lender or broker.

- How long are you planning on owning the house?
- Are you planning on paying points for a more attractive mortgage rate?
- Is there a specific type of home loan you will be applying for?
- What will your down payment be?
- How long have you worked at your present company? Some lenders require the borrower to have worked at their job more than 2 years. They want to see financial stability.
- What is your debt-to-income ratio? (How much money is going out in relation to how much is coming in)

As you can see, a quick free mortgage quote will help, but after the mortgage lenders get the answers to these questions, that mortgage rate may change.

2. Mortgage rates fluctuate on a daily basis.

When shopping for mortgage rates, try to do all of your research within a 2-3 day span. The rates will vary from day to day. This can tend to frustrate many home buyers attempting to work out a budget for their mortgage.

Also, when you get a mortgage rate which appeals to you, make sure to lock it in for 30 days. Therefore, if the rates rise within those 30 days, your rate will stay the same.

3. You should receive a "good faith estimate"

After you submit a mortgage application, you should receive a "good faith estimate" within 3 days by law. This document will detail all of the fees associated with the application, which should not vary during the mortgage process. Note: Your mortgage rate can still change, so as stated before make sure you lock it in for 30 days.

The answer to “How much mortgage can I afford?” is not a hard one to answer. It only takes a little time and effort to get educated about the mortgage process. This small amount of research time can pay off big for you in the long run. Let the mortgage lenders see that you mean business and you know the drill, and you will always be one step ahead of them.