Getting mortgage money was relatively easy just a few short months ago. That was When house prices were steadily rising and homes were selling practically before they were listed. But that was then and this is now. Things have cooled off a lot, and with a slow down in the real estate market has come higher interest rates along with tougher conditions for getting mortgage approvals.



The most important change is that interest rates have been on the rise for several months. If you are new to the house buying market this may not seem all that significant. But the truth is, on a large home mortgage even a small change in the interest rate can make a very big difference to your payment.

In fact it is usually the interest rate that determines how much you can borrow, so it is the interest rate that often makes the difference between being accepted or rejected for a home mortgage. The reason is simple. To qualify you for a home mortgage the lender determines what payment level you can afford. And since a big part of your payment will be interest, a higher interest rate could easily put the payment out of reach.

**Find a home mortgage advisor**

One of the first things you should do before making home mortgage decisions is to find a professional advisor who has a lot of experience in the home mortgage business. Look for an advisor who has in-depth and current knowledge of real estate and mortgage trends and can make use of many different sources of mortgage funds.

This will usually not be your friendly neighborhood banker. Banks work with their own products and are not interested in making you aware of other products that might offer a better deal.

Think about it this way - if your credit rating is good and you have a good steady income there are lots of lenders out there eager to give you a home mortgage. So you can probably get a better deal than the one your bank is offering. On the other hand, if you don't have a particularly good credit rating or have cash flow problems you may need some creative suggestions. But your bank is not likely to give them to you. They want you to follow their rules and mee their requirements.

In other words, a bank is fine if you don't care about getting a better deal. However, if you want lower cost or more flexible alternatives or you need creative suggestions you're better to go somewhere other than your bank.

But where should you go? You should start by looking for a home mortgage advisor who is not tied to any one financial institution, someone who knows the market from the inside and who has access to many different sources of mortgage funds.

**Good news in hard times**

Even when credit starts tightening up there are ways to get a good deal on a home mortgage. Sometimes these good deals involve government backed loans such as FHA loans. These loans exist to help people with even horrible credit to borrow as much as 97 percent of the value of their home. The primary requirement is that they have the necessary income to make regular payments.

Home mortgages like these make home ownership possible for many people who might not otherwise qualify. So they are very good deals for many people. But many traditional lenders will not recommend them because there is not enough profit in it for them. Some traditional lenders are not even aware these alternatives exist.

In fact Even many mortgage brokers will not recommend these loans because they involve some extra work. However, from the borrower's point of view it is worth finding a mortgage broker who will put together the best deal for you. It could make an otherwise impossible mortgage a reality, and it could save you literally thousands of dollars over the life of your mortgage.

**An ARM might be right for you**

There is also another type of loan available called the "option adustable rate loan", commonly referred to as an ARM. This kind of home mortgage allows a person with very good credit to pay as little as 1% interest against a "real" rate of about 7.25%.

But you must be careful with plans like this. The unpaid interest is added to the principal of your loan, so the amount you owe is actually increasing. Eventually you will have to start making payments against the increased principal amount. So your payments will no doubt be higher than they otherwise would have been. After two or three years your payments could end up being more than you can afford to pay.

But what an ARM does is it creates the opportunity for a borrower to make much lower payments for a short period of time. Its most popular use is for people who have short term cash flow problems, or when borrowers see their financial situation improving in a year or two.

**Make the right mortgage choices**

While these days qualifying for a home mortgage is more difficult, and affording a home mortgage is more expensive, there are still ways to save money - especially when your advisor can bargain between a number of different money sources. To find these deals it is very important to find those sources. That is why it is so important to deal with an experienced professional advisor you can trust. This person will have in-depth knowledge of the current home mortgage situation and be experienced in dealing with situations like yours.

The best advisor is a broker with years of experience and hundreds of different lenders to draw on. That kind of broker can find an affordable mortgage for almost everyone.