Low Mortgage Rates for Smart Loan Shoppers
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Low Mortgage Rates for Smart Loan Shoppers |
Negotiating the Offer and the Contractby Joe Taylor Jr.CMR Columnist Before you enter negotiations for a house, it's smart to evaluate your financial situation and decide on your top price, based on the mortgage you can afford. Using variable mortgage rates on interest-only loans may have been a good short-term strategy during the real estate boom, but a cooling trend requires more long-term thinking. Understanding the maximum home mortgage payment your budget will allow will let you know when to walk away from a negotiation. The Appeal of Mortgage Pre-ApprovalObtaining pre-approval from your mortgage lender is a great way to set some boundaries during your house hunt. Not only will you appear more attractive to a seller, you'll clearly know the upper limit of your payment range. Instead of letting an agent talk you into a bigger home mortgage payment, you can use the quick closing promised by your mortgage lender to reach a strong deal.Planning Ahead Can Reduce Your Home Mortgage PaymentThe best way to negotiate a fair price is to do your research about the house and the seller. You should also be prepared to walk away--even if you're haggling for your dream house--if the price gets out of hand. Your dream house could become a nightmare if you can't make increased home mortgage payments on a variable interest rate loan.In many states, including California, once a price has been reached and the terms of the contract negotiated, you will enlist the help of an escrow agent. This neutral third party will handle the finances as your mortgage lender pays off the seller's home mortgage and all ownership documents are transferred. Although it can be frustrating to walk away from a house you really love, this kind of strong negotiation is the only way to prevent yourself from winding up with an overblown home mortgage payment. SourcesJill Hill of Coldwell Banker: "Buying and Selling Real Estate in California"Los Angeles Times: "Offers Made in Writing Are Always Best" Los Angeles Times: "Smart Buyers Know How to Negotiate" The Sideroad: "Negotiating Your Real Estate Contract" About the Author Joe Taylor Jr. coaches beginning mortgage brokers to provide better customer service and to understand creative financing opportunities. © 2006 CMR. All rights reserved. |