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How to Save Money When Applying For a Home Loan

April 12, 2012 | Comments: 0 | Views: 86

Loans have become irreplaceable parts of our lives. Not only they allow consumers to afford stuff they wouldn't be able to buy for cash, but they can also help you get out of financially struggling situation. Even though there are many different loan types, today we are going to discuss housing loans, which are probably the most common form of borrowing. Applying for your very first home loan can be extremely complex if you don't know all of the details. Before applying for your very first borrowing, I suggest you to read the following article and it may help you open your eyes on some new ways to save money when getting a loan for your new home.

The first and most important thing you should do is negotiate your interest rate with your lender. How well this negotiation will go depends on a couple of factors, most important is your credit score. If your credit is in good standing, you have solid chances of cutting your interest rate down. To find your credit score, you should request your credit report. Knowing your credit score before jumping to negotiations can give you benefits. If you have poor credit score, your situation is tougher. Although some lenders might give out bad credit housing loan, you definitely will not be in a position to negotiate. Be persistent and defend your opinion with strong arguments. Tell them they are not the only lender in town and if they will not reduce your interest rate, you will take your business elsewhere.

You might even lie and tell them you got offered better interest rate at other place. Don't want to lie? Do a proper research in your area and compare what interest rates other lenders may give you in your current situation. Remember, even slightest rate change matters. If you do the math, even a quarter percent can save you thousands and thousands of dollars in interest payments. Would you reject an opportunity to save an extra ten thousands? I doubt so!

You also have to understand, that this negotiation possibility is a limited time chance. Because of the current real estate market situation, lenders do not get as many loan applications as they used to receive before the recession had hit the market. Once the market regains its strength, you can forget about this viability. Furthermore, you should find out if your lender is going to charge you extra points on your housing loan. This solely depends on the value of home you are buying. If it is high valued, you should definitely ask for reduction in your loan points.

As you can see, being persistent and standing on your own point is a great skill that benefits you throughout your life. If you apply even these basic tips, you will be surprised by how much money you can save by reducing your interest rate by a merely quarter percent. After all, you have nothing to lose by asking.

Get quick and easy housing loans options with the lowest finance rates available in the market. Also, learn about various ways to refinance home mortgages and work out better plans to suit your pocket,

Source: EzineArticles
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