Making the decision to get a mortgage for a home purchase will involve a lot of personal questions in regards to an individual’s financial picture. When the decision has been made, there are many types of lenders available who can help with the process. These include mortgage companies, banks, credit unions, mortgage brokers and online mortgage websites. However, it is up to you, the borrower, to learn as much as possible in order to get the best deal.
Before starting your search, there are some important questions to ask yourself:
–Do I know how long I will be in the home?
By having a good idea of the length of time you will be in the home will help decide what type of loan to choose.
–What is the status of your family?
If you are planning on starting a family or already have children who may be going to college soon, consider these financial events since they may have an impact on what you can and cannot afford.
–What is our current financial status?
If you are already tied down with debt, it may not be a good time to take on a mortgage. Life events, such as needing a new car, can all have an impact on mortgage affordability.
Once you have answered personal questions, if getting a mortgage is still in the picture, then there are some basic questions to ask when shopping for a good deal:
– What type of mortgage can I qualify for?
You may be surprised to learn that there may be multiple types of loans that you can qualify for depending on your situation. Make sure that each type of mortgage is explained to you in detail.
–What is the required down payment?
Since each program has its own guidelines, down payment requirements will be different. The amount of the down payment will determine if private mortgage insurance is needed, as well as, the cost of the monthly mortgage payment.
– What is the rate that I qualify for?
Each lender that you deal with can give you a list of rates for the qualifying programs. The lender can give you rates based on the information that you give. However, nothing is set in stone until the mortgage has been approved.
– What are the points I will need to pay?
Since points are actually fees that are paid upfront in order to lower the mortgage rate, the borrower needs to know this information. If the lender gives a percentage, request a dollar amount for better understanding.
– What are the fees for the mortgage?
Fees are usually different from lender to lender. This is where a lot of comparison shopping of multiple quotes will come into play.
Remember that your shopping techniques used for merchandise purchases can also be used when shopping for a mortgage. Decisions should not be made on promises made to you, but on what is in writing only. After all, you will most likely be living with this mortgage for several years into the future.