Five things to remember when looking for a mortgage
| The housing market is tight today because there are more people looking for homes than there are homes available. Added to this reality is the fact that new home construction is stalling. Therefore, it’s more of a seller’s market now than a buyer’s market. This can make it tricky to find a good mortgage when you finally do find the home of your dreams. That’s why it’s important to remember these five things when you are shopping for a mortgage. Ask for referrals You’re going to be signing a long-term loan with a duration of at least 10 years. Also, remember that most home loans have a term of about 20-30 years. You’re going to be approaching some sort of a formal lender for this loan. Since the Internet can only give you so much neutral and objective information about a particular lender, go one step further. Ask someone who has gotten a loan from a particular lender that you’re interested in what his or her experience was with that lender. You don’t have to stick to your good friends, relatives, and neighbors for this advice. Some good reference sources include financial advisors, your co-workers or business colleagues, and real estate agents. Since people are exposed to mortgage lenders on a daily basis, they can point you to at least a few quality resources. Keep the reference process objective and neutral by asking for at least 2 high-quality references. Be sure to get a pre-approval letter Okay, so you’ve found your dream home, but it’s useless if you can’t get the funding to buy it. Contrary to popular belief, getting approved for a mortgage is not a cut and dry or easy process. You’ll find it easier to get the mortgage that you want and need if you get a preapproval letter beforehand. The pre-approval letter will give you a good idea as to how big of a loan you will likely be able to get from a lender. You’ll also be in a better position to close the deal on the big day. Either you or the mortgage company will provide the lender with certain documents that will verify your total income and personal assets. You want to make sure that you get a verified pre-approval letter. Sure, you can always get one online but most lenders don’t honor those because they’re unverified. Go online to check lenders out Please don’t take what’s written on their websites at face value. It’s important for you to take some time and do some extra research both online and offline. Part of this includes reading the fine print on loan and mortgage applications and documents before signing them. Be sure to pay attention to the following details: Be sure to read the fine print. That’s where lenders and mortgage companies tend to hide not so favorable loan and other terms. Make sure that they don’t hide origination fees in the fine print Social media will be your best friend in this regard. You can go to sites like Zillow, Facebook, and/or Yelp to read reviews about certain lenders. You’ll be able to get valuable and insightful information that won’t be able anywhere else. Evaluate the quality of customer service Hey, loan companies are providing you with a valuable service when they evaluate you for a loan. It’s time that you evaluated them on the quality of their customer service. Every lending company says that they’ll offer you a great loan at great rates and on great terms, but is this really always true? The truth is that larger companies are better at providing great service, but smaller companies can provide great rates. It does, therefore, pay to do your ‘homework’ before choosing a lending company. Be sure to pay attention to things like rates and level/quality of service that each lender provides. Keep in mind that rates can change on a daily basis. That’s why you want to get quotes and rates on the same day whenever possible. Be inquisitive as to how fast the lender can process your loan. Also, be sure to rate their customer service reps for responsiveness, knowledge, and professionalism. You take charge when choosing a lender Okay, so unless you have a lot of time, knowledge, or both, you’re probably working with a real estate agent and that’s great since that person can take care of a lot of things that are involved with closing deals and buying and selling houses that you may have neither the time nor the expertise to do well. That said, you want to be in charge when choosing a lender. After all, since you’re the one buying the house, you can rest assured that you’ll be careful to choose a lender who has your best interests in mind – believe it or not, your real estate agent may not. You can consult family and friends when comparing lender rates to make sure that you get the best deal possible. Don’t paint yourself in a corner So hey, you’re making a huge and life-changing decision so you want to make sure that you make the right decision the first time around. That’s why it’s crucial to do your research and homework before choosing a lender to make sure that you get the best deal possible! |
