home loanA Home Loan is the largest purchase a person or family will make in their lives. You can save tens of thousands of dollars in interest charges, on a home loan, by shopping for the shortest-term mortgage you can afford. Negotiating for the lowest interest rate with the fewest points can save you even thousands more on your mortgage.

Like the interest you’ll be paying each month, points are finance charges too, except you pay them up front. Lenders blend the points with the interest rate. For example, the more points you pay, the lower the interest rate the bank will charge you over the course of the loan. Also, like interest, points are 100% tax deductible in the year you pay them.

Remember that the “friendly” real estate agent is working for the people selling the home – not you. The standard practice is for the seller to hire an agent, who then takes over marketing the home and seeking out potential buyers. For this, brokers are usually paid around 6% of the sale price, which gives them a built-in incentive to find the seller the highest price they can. So don’t get too cozy.

Always negotiate with more than one lender, letting each one know that you’re shopping for the best deal. Ask each broker or lender to lower the fees, points, or interest rate. And ask each to meet — or beat — the terms of the other lenders.

A government home loan helps people buy or refinance their current home with a low down payment. The federal Housing and Urban Development Program (HUD) doesn’t give you the loan directly, but will insure your home loan with an approved mortgage company, bank, or savings and loan association. Contact an approved HUD lender for assistance with a home loan plan that is appropriate for you.

HUD-insured loans are available in rural as well as urban areas for single family homes and for 2,3, and 4-unit properties. HUD, in some cases insures loans for people who have credit problems and do not meet the usual credit requirements needed to buy a home.

If you’re interested in a government loan, and you meet the credit qualifications, you may be able own your own home with as little as 3% down. On a $100,000 home, that’s a down-payment of $3,000, compared with $10,000 – $20,000 for most conventional home loans. You also can roll your fees and closing costs into the mortgage.

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