Golden Rules to Follow for a Mortgage – Zack Childress

Introduction

Mortgage-definition

A mortgage is basically a loan obtained by you to purchase a property. It is given to you by your lender based on your income, credit rating and other debts. There are some essential rules to follow while taking out a mortgage. Zack Childress, a real estate author and mentor gives you tips on the basic mortgage rules.

Rule 1

Perfect papers must be in place

Be sure to complete your paperwork in a proper manner. Your W-2 form sent by your employer, pay slip and bank statement are the essentials.

Rule 2

Stay away from lead generation pages

Don’t initiate enquiries in lead generation sites. They may flood your mail box with plenty of mails and mobile with calls.

Rule 3

Affordability

You should decide the mortgage amount according to the Pith test. Your housing costs must be less than 32% of your gross monthly income. This is according to the Canadian Housing and mortgage corporation. Housing related expenses include property taxes, interest and principle of your mortgage payments and heating bills. After you clear your Pith test, the next thing that you must decide is to take a mortgage in such as way that your total debts are lesser than 40% of your gross annual income. This way you will not take out on a mortgage which you are unable to repay.

Rule 4

Look for servicers who treat you well

Servicers are those companies which collect your mortgage payments on behalf of your loan lender. There are laws now to ensure that these servicer companies treat you properly. This means that they have to offer good customer service. They have to answer questions related to your mortgage. The time taken to respond to your questions has to be really quick. Within 5 days, they have to intimate you that they have got your query letter. Within 30-45 business days, they have to fix up errors and send you the answers, else they have to brief you as to why they cannot fix it or why they cannot answer the question.

Rule 5

Pick the right interest rate

The interest rate at which you pick your mortgage payments is either fixed or variable. Fixed interest rate means that it will remain stable over the period of the mortgage but will be higher. Whereas the variable interest rate will be unstable for the period but will be lesser. Pick the interest rate according to your financial position and your convenience.

Rule 6

Borrowers must ensure that they don’t get late credit

The lender must give you credit for the payment on the date of making the payment. He should not delay the credit and brand your payment as late.

Also the lender must inform you if he puts the partial payment made by you into a separate account because lenders usually use such payments in this manner.

Conclusion

In this article, there are 6 tips on how to get mortgages. If borrowers go conscientiously by these tips, then they will not have any unwanted mortgage problems. Some rules like rule 4 and rule 6 are listed by the federal legislators.