After weeks, or months, of searching, you’ve found the property you’ve been looking for. Now what? It’s time to start the mortgage process. It’s not as difficult as you might think. Just take it one step at a time, starting with choosing a mortgage lender.
Update your financial portfolio before choosing a mortgage lender. The better your credit status, the easier it will be to maneuver through the mortgage system.
•Get an updated credit report. Take care of details that are not correct and pay outstanding debts.
•Make a list of your financial debt. Include balances owed and account numbers. You’ll need this information when you fill out a loan application.
•Put together a list of all your assets. This should include both checking and savings accounts, investment accounts, retirement accounts and any personal property you own.
Start checking the current mortgage interest rates. The first mortgage lender you talk to may not have the best loan package.
•Call your current mortgage lender or bank, if you’ve had a good experience with them in the past. Being a return customer may give you some leverage with negotiations.
•Search the Internet financial sections for mortgage interest rates.
•Talk to friends for recommendations.
•Take recommendations from real estate professionals for mortgage lenders they’ve had a good working relationship with.
Ask each prospective mortgage lender what their interest rates are for the types of mortgages you are considering. Don’t be afraid to ask questions if you don’t understand the type of loans they’re proposing.
Compare the interest rates applicable to various loan terms at each mortgage lender. How does a 30-year mortgage interest rate on $100k compare to the interest rate on 20- and 15-year loans? You won’t know unless you ask.
Request a written explanation of the estimated charges, costs and/or fees that the lender would require of you at closing time. This statement is a “Good Faith Estimate.” Most reputable mortgage lenders will offer to furnish this for you. Make sure the Good Faith Estimate includes costs for all points, processing, legal fees, filing and closing fees.
Compare all written documentation from each mortgage lender. The lowest rate is not necessarily the best option if there are thousands of dollars more in fees and expenses than a slightly higher interest rate loan.
Narrow your possible choices of mortgage lenders. •Pass on the mortgage lenders that did not furnish clear written information.
•Understand each loan type the mortgage lender is offering. There’s a great deal of difference in a 30-year fixed-rate and a 30-year adjustable-rate mortgage (ARM). Know the difference and feel confident in the explanation provided by the mortgage lender.
•Negotiate the fees on the Good Faith Estimate. Lenders may be able to waive or lower some of the fees. You won’t know unless you ask
8.)Contact the mortgage lender you’ve selected to lock in the interest rate you’ve negotiated.
Finding a quality lender is crucial in your homebuying process as this may make or break your opportunity to a successful Home Buying experience.