Before we begin, congrats on the big decision of buying a home. It is indeed a life-altering decision, and a lot of thought goes into taking a plunge. While you might have put in a lot of thought into the location, size, age, and budget for your home, you might have missed out on research for mortgage options.
If you are thinking about what is there to research while applying for a mortgage, let us tell you that there is a lot! To begin with, it is important to ensure that you land the best mortgage deals from the numerous lenders in the market. And it is important to make sure you evaluate and analyze every option ahead of you to ensure you find the ideal mortgage broker. While that can be taxing, it could be made simple. All you have to do is to follow these four tips, which will make your process of finding a mortgage broker relatively
1. Get Peer Review
Just the way you take the help of a realtor while you are going home hunting, you should seek the help of home loan experts while trying to get a mortgage. This will ensure that you get the best deals regarding the interest rate, loan tenure, closing fees, and monthly EMIs. A financial advisor or a loan expert would evaluate the various loan options that you have based on your creditworthiness, employment, savings, and loan amount. They would then point you in the direction of various banks, private lenders, and financial institutions that would help you with the process of financing your dream home.
Remember that the right professional would also help you with the negotiations to ensure that you land the perfect bargain. And the best way to find a reliable mortgage broker is by getting your friends, peers, and other members in the community to recommend the agencies or people whose services they have used. This would ensure that you are paying for a professional who is well-versed in their industry and knows how to get you the best deals and discounts.
2. Compare Quotes
You do not have to settle for the first mortgage broker that you come across. While it could seem reasonable and time-saving to pick one that seems like the best on the first impression, it could not be the truth. So, do your research, ask for quotes, and make sure you pick the mortgage broker that is an expert in the region where you are trying to buy a house.
Taking your time and comparing quotes will also ensure that you would not fall bait to any hidden charges, clauses, and fees. When you sign on the fine print without giving it a thorough reading, you might end up paying through your nose, and that defeats the whole purpose of hiring a mortgage expert in the first place. When you research, you have the upper hand in negotiating the interest rate and the payment terms. And if your credit score is high, most lenders would be willing to haggle.
3. Explore Various Sources
The common knowledge is that you would have to approach a bank or a financial institution to get a home loan. However, that is not the only way to source your mortgage. You have numerous options to pick from based on your credit score, the interest rate, loan period, etc. So, you could opt for some of the unconventional mortgage types, too, like credit unions, correspondent lenders, mutual savings banks, and mortgage lenders.
Each one of these has a different set of terms and conditions for loans and mortgages. And could come in handy based on your creditworthiness, membership, and region. The interest rates and repayment clauses differ significantly in these institutions in comparison to the conventional banks. So, make sure you give these a try, too, before settling down on a mortgage lender. That way, you can be completely sure that you have found the best deal.
4. The Fine Print
Most of the points that could run you in trouble or have you second-guessing your decision are in the fine print. You could run the documents through an attorney to make sure the legal clauses are right. Besides that, it would also help if you check for the details on the commissions, deposits, application fees, credit report changes, etc. All these are vaguely mentioned in most cases and explained in detail in the fine print. That’s something most people miss reading and end up wondering why they were not paying more attention while signing the dotted line so avoid that.
It would also help you if you ask a lot of questions and have all your doubts clarified. So, talk to all your peers who are new home buyers and ask them for all the questions they had asked for, the ones they wished they had asked, and the ones they think you should ask. Also, make sure you have questions from your research to ask the lenders. You might be afraid that you are putting the lender in an uncomfortable spot by asking too many questions. But did you know that most lenders perceive you as serious when you ask many questions?
Few lenders will let you avail of a loan at a lower interest rate if you buy discount points. So, when you are willing to pay some money upfront, you could secure a lower rate of interest on the mortgage, which would come in handy in the long run as the money you would pay over the years will be relatively lower.
Besides this, it would also help if you manage to find a preapproval for your loan application. This would give you an edge over other buyers because the seller would see you as a serious buyer compared to your prospects as a lender has already signed off on your loan application. You are a few steps closer to securing a loan than the other prospects. So, that leaves you in an advantageous position and ensures that you get your dream home!