The right or wrong decision when signing your home mortgage can mean
thousands of dollars difference in interest paid. There are very
important considerations to evaluate before you commit to a 15 or
30 year note. For many of us our mortgage payment is the most important
financial decision we’ll ever make. Doesn’t it make sense
to know as much as possible about the financing of our home? Take
the time to thoroughly investigate all of your options!
Unbelievably, many of us sign the
first mortgage placed in front of us. Typically the excitement
of the new home purchase reduces the mortgage to not much more
than an afterthought. What you read here could save you hundreds
or even thousands of dollars. Your real estate professional has
established relationships with the top lenders in your area.
By aligning yourself with a professional agent you ensure that
all the financial steps are taken care of properly and economically.
Utilize a Lender With Established Ties
to an Agent - Lenders are much more flexible
with the real estate agents who have done business
with them previously. This relationship then establishes
them as a team. The lender and agent work effectively
together, referring each other business. That’s
why a good agent can make substantial difference
in setting up the most economical financing. And
the right financing can, literally, save you tens
of thousands of dollars over the life of your loan!
Don’t Attempt Paperwork
Alone - All the paperwork required to complete the
purchase of a home can be quite intimidating and frustrating
for a home buyer. Make sure you have your lenders help you
with all the paperwork. Get help from your team, your lender
and agent. Their expertise will help alleviate the stress and
it will prove to be invaluable before you sign your mortgage.
Look at All Your Options -
Make sure you see at least 5 loan programs for your mortgage.
Lenders have at least 10 programs and should work with you and
your agent on deciding what is best for your circumstances. Evaluate
all your options. After all it’s your money you’re
spending - not theirs!
Demand Service -
There is little difference between a bank, savings and loan,
or a mortgage broker when it comes to the competitiveness of
their loan rates. The difference is in the service they provide.
It is their job to serve you! You want to get the loan approved
and move into your new home as quickly as possible, but don’t
overlook the fact that you are the one spending the money and
they are the ones who should cater to your needs. Don’t
let the process become so intimidating that you lose that understanding.
Stay in Complete Touch -
You should receive a written report from your lender about every
step. This will ensure that no details are overlooked and there
will be no surprises
.
Negotiate a Flexible Loan -
Don’t just accept the terms they lay down in front of you.
Lenders are in the business of loaning money and they want your
business. Make sure you examine every option available to you.
If you negotiate a variable rate loan, many lenders have the
ability to move you into a fixed loan if rates start going up.
Make sure that you understand whether or not that is an option
in the package you are looking at.
Don’t Give Up on the
First No - Initial decisions are not always final
decisions. Going to a higher authority can sometimes get you
the loan, but do so with the assistance and compliance of your
lender and agent. Many times special circumstances when explained
properly to the person in charge, will win you the loan.
Don’t Wait for the
Bottom of the Market - The odds of you hitting the
bottom of your market are about like the odds of you hitting
your state lotto! You will almost never hit the bottom of a
market. And trying to time it exactly right is often costly.
It usually causes a person or family to miss out on the opportunity
to purchase a very nice property. You’re better off simply
negotiating the best rate and terms you can at the time you
find a property. If interest rates go down, you can refinance.
This is a much better approach because you won’t miss
out on the property you’ve spent so much time locating.
Be Honest With Your Lender -
Your lender wants to help you with your loan. The only time they
get paid is when you get approved. The more information (good
or bad) you provide your lender, the easier it will be for them
to get an approval. It helps them present the loan in the best
light. This in turn helps the loan get the highest approval rating.
Become Completely Educated -
Pick your lender’s brain. Lenders will teach you all about
your various options, even if you haven’t found the right
property yet. They will be very patient with you while you are
looking, especially if you have aligned yourself with the right
agent. They understand all the up-front work will pay off in
future business. Your agent will then continue to refer people
to the courteous and service-minded lender on down the line.
Get Prequalified -
Lenders will provide you with a certificate of pre-qualification.
By getting prequalified you know exactly what financial parameters
to stay within. Your agent and lender will consult with you and
help you get qualified for the loan that best fits your needs.
Many times they are able to get you a larger loan than you may
have thought possible.
