of Finding The Right Mortgage (NAPSA)—Home ownership is a — a at an all-time high, yet in a recent best for you. Talk to someone you trust on financial matters to aid survey of U.S. consumers commissioned by the HSBC Center for Consumer Advocacy, 73 percent said they have limited or no knowledge about the mortgage process. In addition, the majority spend two you in this process. Your mortgage for mortgages—the most significant purchase many people make. Here are some things to consider before seeking a mortgage: Assess your credit. Lenders what mortgageis best for you. Educate yourself on lender options. Dedicate some time here. choices may include fixed-rate, adjustable-rate or hybrid mort- gages with different terms. There are many factors, such as how long you plan to stay in your weeksor less researching options take your borrowing record and existing debt into account when they offer you a mortgage. Ensure your credit history is accurate. Obtain your credit information. You are entitled to one free credit report per year from each of the three national reporting agencies— Equifax, TransUnion and Exper- ian. Go to www.annualcredit report.com to request your free report. Review your reports and have any errors corrected. Bolster your credit score. Take the additional step of paying the nominal fee to get your credit score when requesting your credit home, that will help determine Buying a homeiis likely the single biggest purchase you’ll ever make, so take some time when shopping for a mortgage—and find the one that’s right for you. Finding the right mortgage should be as important to you as finding the right home. Compile a list of potential mortgage lenders or bro- time to see if you can borrow the kers and contact a numberof them online or in person to compare the factors lenders will evaluate, along with your credit report and score. As a general rule, no more terms and all related costs. You rest with a mortgage. Examine your income and your debt, two than 28 percent of your income should go toward your total house payment(principal, interest, taxes and insurance). Also, remember to take into account the expenses of running your new home. What if you haven’t saved 10 percent for a down payment? Don’t give up. If you can come up with style of mortgage, interest rates, may decide to apply with more than one lender. If that’s the case, concentrate your applications within a fairly short time frame— say, two weeks—so the multiple requests for your credit report don’t hurt your credit score. Find resources. Discover more about the home ownership process and find other financial educational resources at www. YourMoneyCounts.com. report. A strong credit score, usually just 3 percent, or even less, you above, will help you attain more favorable loan terms. Paying atten- gage. Low- and moderate-income consumers may qualify through the Community Reinvestment Act, U.S. Home Ownership Attitudes below what is normally required. If you're a first-time buyer, you say owning a homevs.renting is a smart associated with a rating of 700 or tion to your credit rating well in advance of your mortgage process gives you timeto boost and preserve your rating. Pay yourbills on time and pay down your balances to im- prove and maintain yourcredit rating. Aim to keep balancesto at least 50 percent or less of your available credit. Consider your financial situation. Take a close look at your finances and ask yourself if you have enough saved for a down payment, which is typically 10 to 20 percent of the total cost of the home. If you have the savings, it’s may still be able to find a mort- which requires some banksto offer mortgages to people with incomes may also be eligible for some breaks. To find out what you qual- By The Numbers 84% financial move 62% ify for, check the U.S. Department of Housing and Urban Develop- say they have limited knowledge about the mortgage process good idea of what you can afford of morfgage borrowers were frustrated by some aspects of the mortgage process ment Website at www.hud.gov. Discover the best type of mortgage. Now that you have a and what yourcredit rating is, you're ready to explore various mortgage options to see what’s 48% Source: HSBC FinancialLiteracy Study, March 2006. @
