Best Mortgage Loan:
Getting into homeownership and learning about mortgages is a big, scary mess of a business. Credit, borrowing money, and understanding the ins and outs of the real estate landscape are all life skills that take years to master or even begin to scratch the surface of understanding.
How do you ensure you’re not being screwed out of thousands of dollars with your mortgage loans? It’s a tricky slope, and you’ll run into confusing obstacles.
These 5 tips will help guide you towards the steps to making the best decision for your family and your finances while offering valuable advice that can be implemented in other areas of your borrowing future.
1. Start With Yourself!
Before you even start going shopping for a loan, ensure that you’re in a good place for it personally. Having a good credit score and years of credit history aren’t always possible, and that’s understandable. However, it would be best to keep in mind that the better your personal financial standing, both current and in the past, the more power you have.
It would help if you also changed your thinking. So many people go into mortgage loans based only on the interest rates, and they don’t bother to consider the other aspects. While low-interest rates are obviously the main goal, think reliability and customer service, too. You’ll be with this company for years, so trustworthiness is key.
2. Consider a mortgage broker!
Knowing everything on your own and finding the time out of your busy life to spend the time and effort needed to find the best deal is nearly impossible unless you’re a seasoned professional. People find themselves in bad mortgage situations frequently due to mistakes or inexperience, or wrong information.
How do you combat that? It’s a bit of a price, but a mortgage broker can be hired to do the heavy lifting for you. They will review your financial standing, create the applications, discover the best mortgage lenders, and seal a deal for you fast and easily.
Rates vary by the broker but expect to pay about 1% of the full loan cost. This is a great option for first-time buyers or those who aren’t well-versed in the real estate landscape.
3. Take the advice of your real estate agent!
This one is a no-brainer, but the person who knows best what you should do to get the house you want is your agent. They want the sale to happen just as much as you do so that you can count on their word.
Plus, some mortgage loan companies will offer referral discounts if you let them know that you were directed to them by your agent.
For a second opinion, contact your other homeowner’s friends and family. You’ll get plenty of horror stories, but focus on the positive ones and follow their lead. Experience homeowners can offer you more guidance than anyone else, especially if they know you well!
4. Know your options!
Mortgage loans can be obtained in many different ways, and like anything else relating to money borrowing, they all have their bright and negative points. Knowing a better idea of just what each method can provide will help you decide the best route for your family.
The most common way of obtaining a loan is through your bank. Now, hold on! It’s not that easy!
There are two different kinds of banks you’ll be able to work with. Big-name banks and small local banks. Both can be great, depending on your circumstances. So let’s look a little closer.
Nationwide banks are extremely trustworthy and reputable, but they have their downsides, too. A few things you’ll have to sacrifice with a big name bank like Chase or Citi include:
- A long wait for approvals. They have so many applications to consider. It can be over a month before you get an answer.
- Detached customer assistance and delayed problem-solving.
- Less chance of getting accepted for anything with poor credit scores
On the flip-side, small banks offer solutions to all 3 of those downsides listed, but not for a price of their own. Cons relating to working with small, local banks include:
- Fewer options
- Higher interest rates for their own protection
If going through a bank, big or small, isn’t your cup of tea, there are online mortgage services available, too. These are a little riskier since it’s harder to confirm their ability to provide and their level of security through a webpage. Going through online lenders will require a little more research and looking around.
Pros of using an online mortgage lender:
- Super fast-acting services and quick deal closing
- Flexibility on credit scores and eligibility, but at higher APR
- More options since you’re not restricted by location
Cons of using an online mortgage lender:
- Simple forms to fill out at home leaves plenty of room for mistakes to be made, lessening your approval chances.
- More work for you when it comes to finding the best deal
- Outstanding customer service isn’t always available
5. Conduct your own research!
Never decide your money, especially in such large sums, without doing research first! Exhausting every option, comparing everything you find, and sticking hard to your bargain are all included in the recipe for success when it comes to finding a mortgage loan.
Even if you work with a broker, make sure to double-check when he brings you and ask every question you think is important. If you’re not sure what to ask, consider some of these key talking points:
- What are additional closing fees there to worry about?
- Will these fees be included in the mortgage, or is there a way to waive them?
- Are there different down payment options to look at?
- How much time do you estimate is between now and closing?
Following these 5 easy guidelines and putting in a good amount of research to every option is the ticket to a fast, easy mortgage loan closing that works best for you, right where you’re at. If you have more to add to these tips, let us know below!