Mortgage Saving Strategy

Here are several useful suggestions offered by financial experts on how to manage your personal finance, in particular how to save on your mortgage:

• Consolidate your debts. You may currently owe many debts, such as auto loans,
  student loans, home improvement loans, and endless credit cards debts. Consolidate
  these debts would lead you one big step ahead to improve your financial situation.
• Take advantage of lower rate home equity loans to consolidate your debts.
• Consult your Tax Advisor for possible tax savings. Many home equity loans are
  tax deductible.
• Beware when home mortgage interests rate are up and down, catch the lower rate train
  before it is too late. Many people did not refinance higher mortgage loans during the
  lowest interest period of 2003.
• Be disciplined when using credit cards, avoid them if at all possible.
• Tailor financial terms to suit an individual’s particular needs, capacity, and future
  perspective when selecting a mortgage. i.e. if you are most likely to move within 3 years,
  why would you need a fixed 30 years loan.

What is the Best Interest Rate You Can Get?

Contrary to public perceptions, interest rates that are offered to each individual may not be the same on the same day, from the same bank. Here are some reasons behind it:

• Loan Amount
-   Conforming loans have lower rates. Conforming loan is a loan amount  <=  $333,700
-   Jumbo loans have higher rates. Jumbo loan is a loan amount $333,700  <=  $650,000
-   Super Jumbo loans that are  >  $650,000 have the highest rates

• Loan to Value (LTV) Ratio, in general but vary from banks to bank
-   LTV  <=  70%     Better Rate
-   LTV  ~  80%      Typical Rate
-   LTV  >  80%      Higher Rate
-   LTV  ~  100%    Even Higher Rate

• Your Credit Scores
-   FICO score  >  720     Better Rate
-   FICO score 680  ~  720     Typical Rate
-   FICO score 620  ~  680     OK Rate
-   FICO score  <  620     Higher Rate
-   FICO score  <  600     Sub-prime, Highest Rate