Although the word “mortgage” comes from the Middle Ages (it means “death pledge” in Old French, referring to the borrower’s pledge to remain on his property until he dies), the idea of a mortgage goes back way further in time. One of the oldest records of mortgage law, for example, is called the Manusmrti. At least 2,000 years old, the Manusmrti or “Code of Manu” lays out ethical lending practices and calls out unethical ones. Though much has changed since ancient times, mortgages are still around and aren’t going anywhere anytime soon.
The best mortgage lenders tend to favor the borrowers who show the best signs of maturity and responsibility. In order to guarantee the best home loans rates and deals, homeowners need to be very careful and calculating in researching mortgage deals. In order to do so, here are three piece of advice for prospective homeowners to follow:
- Clean Up Your Credit Score: Having a strong credit score is the first step in any venture into mortgage lending. Home buyers should make sure their credit rating is as impressive as possible. They should review their credit reports and search for any errors that may skew the score. The Home Loan Learning Center reports that most lenders mandate a minimum credit score of 680 from borrowers (or 620 for federal housing).
- Don’t Rock the Boat: That is, when securing a loan, be sure to stay with your employer. Any major changes in employment or income can deter or halt the mortgage process altogether.
- Reserve 3.5% of the Loan For the Down Payment: Though mortgages rates vary from lender to lender, the average cost of a down payment is roughly 3.5% of the total worth of the loan. Be sure to reserve enough money for the down payment as well as for other closing costs before you sign any papers.
For more information about the best mortgage lenders and how to secure a favorable home loan, feel free to leave a comment or question at the bottom.