You’ve decided to invest in a home in 2015. You’ve posted your new year’s resolutions about it on Facebook and Twitter and already started internet browsing the homes for sale in your favorite neighborhoods. Now that you’ve got the ball rolling, choosing a mortgage lender or broker is one of the lesser fun things to do when considering the purchase of a home. You’re not imagining drapes, you’re imagining interest rates. However, getting in your loan applications early has a big advantage when putting down offers on a new house. Having your prequalifcation letter before you even start doing walk-throughs is an advantage you might want to consider and a major hurdle to get over early in the process.
Get References
Ask friends and loved ones that have in recent years purchased a home about their experience with their mortgage lender. Would they use them again? Did they get the rates they were promised? Were there any hidden fees? Ask them if it felt easy working with their lender and had the terms and conditions of their loan explained in a straightfoward manner.
Shop Around
Use the internet as the handy tool it is to browse home loans and rates anonymously. It is not a good idea to provide personal information while shopping online. There are plenty of online spots that provide quotes from banks and credit unions without the use of personal information. Once you’ve scoured the internet for as much information as possible, go visit banks with reputable names in your community. Your own bank, with whom you have an account, may be willing to offer you a better deal since you already bank with them. Compare terms all around.
Have someone else Shop for you
Using a mortgage broker means they find the deals for you. Ask them how many lenders they’re willing to check out for you. Ask how the broker will be paid, usually by you and the bank, and have them put it in writing. Tell them to include any fees, terms or penalties that go along with the loans they recommend. Be wary of their compensation from the bank being too high, a less than reputable broker might be incentivized into leading you toward a higher interest rate loan. Its also a good idea to check out a broker you’re considering hiring with the Better Business Bureau.
Starting the process on your financial backing in the purchase of a home early is never a bad idea. It can help you make smarter offers on homes, narrow down your choices and help you get that much closer to achieving your goal this year!
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