While most of us take time when choosing our ideal home, unfortunately, we don’t give the same amount in choosing our mortgage. This being said, we end up paying for more than we get. Looking for affordable mortgage isn’t easy and comparing lenders isn’t fun. However, while this isn’t fun, we should not make it as our reason not to shop around mortgages. There is just so much at stake when it comes to financing our home. Not sure where to start in mortgage shopping? Then take these tips below:
Knowing mortgage terms will make your mortgage shopping easier and more convenient. Make sure that you know the difference of mortgage broker and mortgage lender. Mortgage brokers help you find mortgage lenders. They have access to different mortgage lenders where you can choose from. While hiring mortgage brokers can be a good idea, don’t just rely on them. In order to have more choices, you have to shop for mortgage lenders as well.
Know How Much You Can Afford
To have an idea how much home you can afford, use a mortgage calculator. You will find out the monthly payment that you will likely pay as well as the income that will be left after paying mortgage. Apart from this, it will also boost your confidence in shopping for mortgages.
Note: You must check your credit score to help you repair bad credits and obtain good loan. Mortgage lenders check your credit report thoroughly to decide whether you are worthy of a mortgage.
Get mortgage information from different lender
Don’t just rely on your personal bank and shop with mortgages as much as possible. This will help you get the best bargain. Don’t just ask for interest rate and monthly payment. Get the needed information such as the complete price of the mortgage, mortgage rates, fees and points. To get a good comparison, ask your prospect mortgage lenders the same amount of loan, term and the type.
Don’t forget to ask for adjustable rates and ask your prospects to calculate your possible monthly payment by year, in 5 years or 10 years from the present. Compare the APR, monthly payment, lender fees and the total cost of the loan including the interest, fees and overtime. Last but definitely not the list, don’t forget to compare referrals.
Note: You can ask friends for recommendations especially those who just obtained their loan.
To get a good bargain, check whether you can qualify for mortgage programs. You might get a loan via FHA, Department of Agriculture, VA, local buying program or first time buyer’s program.
If you have already found the perfect mortgage loan and lender, negotiate for the best bargain. There are mortgage lenders who change the price of the same mortgage to different customers. Ask your mortgage lender to put down all costs of the mortgage in paper then request to reduce mortgage fee or possibly lower the rate.
If you plan on having your title insurance or appraisal, shop for the services that do this or your risk being overcharged. You can have a third party service that charges at reasonable costs.