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Thursday, February 19, 2009

Things You Need To Know Before You Sign For Your New Mortgage

By Rick Greene

Economic times are tough. Because of the fact that properties don't rise in value and in some cases even drop in value, homeowners are worrying about the debt they incurred on their house.

The next few months, many fixed rate mortgages are set to be renewed. You will get an offer from your lender for a new mortgage. Be sure to check this thoroughly. Banks have taken a lot of hits lately. Luckily for them, the government has decided to pump billions and billions of tax dollars into their companies. Despite these 'rescue plans', banks have yet to recover completely.

Before you go into the negotiations for a new mortgage, be sure to check what fees are quoted. Many mortgage fees have gone up the last couple of years. Also, if your credit score has gotten worse in the last few years, you may be confronted with a higher interest rates and higher monthly payments. If, on the other hand, you have equity in your home and a pretty clean credit history, you can get ready to negotiate with your lender.

You need to be aware of the fact that lenders want to keep their clients with clean payment histories. They appreciate the fact that these clients are reliable and favor them over the occasional price shopper. This can help you in the negotiations.

Before you go and negotiate with your lender, do your homework and browse the Internet for information. It's easy to find the current average interest rates for your type of mortgage and see what deals are out there. Know upfront what you can expect.

Have your lender spell out all the fees involved, not just interest rates. You want to know the total cost of changing or renewing your mortgage, so you can make an informed decision. If you don't ask for a complete picture now, there's a serious chance you will get it after the closing has occurred and you've already paid all the fees.

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