Equal housing mortgage lender Joe Raquiza gives some helpful tips to people looking for a good deal on their mortgage.

1. 10 Mortgage Tips
By Joe Raquiza
MLO # 114206 | Company # NMLS
81395 | WA CL-81395

2. 1. Document your finances
Since the new mortgage regulations that came in
place back in January, mortgage lenders have
been especially diligent when underwriting home
loans. This means borrowers need to have solid
proof that they’re capable of repaying their loans.
This means keeping good records of your
finances, including bank statements, tax returns,
W-2s, investment accounts and any other assets
you might own.

3. 2. Act fast
Since the Federal Reserve reduced the pace of
the economic stimulus program, rates have
climbed. Once you’re comfortable with the
numbers, you need to act fast.

4. 3. Refinance if you can
When rates jumped last year, many
homeowners lost the chance at refinancing at
a lower rate. However, those paying an
interest rate higher than 5% still have an
opportunity.

5. 4. Use your bargaining power
As mortgage rates climb, buyers become
infinitely more important. Therefore, they
should take advantage of this newfound
bargaining power and shop around for the
best deal.

6. 5. Learn your rights
With the new mortgage rules created this
year, mortgage borrowers got many new right
as consumers. If you have issues with your
mortgage servicer or fall behind on payments,
then you should make sure that you’re aware
of your rights and can put them to use.

7. 6. Take care of your credit
Without decent credit, getting a mortgage is
nearly impossible these days. If you’re
planning to get a mortgage, you should
monitor your credit history and score until
your loan closes. The best mortgage rates
usually go to borrowers with credit scores
higher than 720. You could still get a
mortgage with a score of 680, but lower
scores mean higher rates or higher closing
costs.

8. 7. Don’t overspend
Lenders never want to give out loans to
borrowers with little money left each month
after they pay their mortgages and other debt
obligations. If that becomes the case, then
the lender will inform you that your debt-to-
income ratio is too high and you don’t qualify
for a loan. Therefore, try to keep your
monthly debt obligations below 43 percent of
your income.

9. 8. Consider alternative mortgage
options
Mortgage rates may be rising, but there are other
ways to grab a lower rate. For example, a
homeowner planning to keep a house for 7-10
years could take advantage of lower mortgage
rates by choosing a seven or 10-year ARM instead
of the 30-year, traditional fixed-rate
mortgage. Rates on adjustable-rate mortgages
can be as much as one percentage point lower
than on fixed-rate loans. If you’re not sure how
long you plan on keeping a house, then a fixed-
rate loan is probably a better choice.

10. 9. Reconsider an FHA loan
FHA loans have been popular among first-time
homebuyers for a long time, since they require
low down payments and have somewhat less
strict underwriting standards than conventional
loans. However, this comes at a price. Mortgage
insurance premiums on FHA loans will most likely
continue to rise in 2014, and after recent
changes, the borrow will now be required to pay
for mortgage insurance for the life of the
loan. Therefore, try to qualify for a conventional
loan before applying for an FHA mortgage.

11. 10. Don’t panic
While mortgage rates have been climbing,
don’t panic and think that you have to buy a
home now or grab a low rate. If you’re
shopping for a home, do your best to move
quickly, but still remember that this is one of
the biggest financial decisions of your
life. Don’t get your mortgage or buy your
home until you feel you’re 100% ready.