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.
1. 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!
2. 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.
3. 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!
4. 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.
5. 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.
6. 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.
7. 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.
8 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.
9. 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.
10. 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.
11. 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.
