How to get the best Deal on a Home Loan
The mortgage process is complicated, especially for a first-time buyer than is unfamiliar with working out loan rates. Before getting stuck in unreasonable terms and potentially defaulting on a significant financial commitment, shop around with multiple lenders. If you ask yourself the right questions, it is easy to figure out which mortgage options offer you the best deal on a home loan.
Do You Look Good on Paper?
The years leading up to a home purchase are the opportunity to find a great job and start building up credit. It is worth waiting a few years to prove to lenders that you have a solid history of making payments on-time without any defaults. Your goal is to find out which lender offers the lowest rates to you, and it’s easier to work out a deal when they feel confident in your ability to pay.
Are You Qualified for Any Special Programs?
Researching various home-buying programs is worth the extra time because it can save you a lot of money if you qualify. A first-time homebuyer may be able to take advantage of assistance from the Federal Housing Administration or other local options. If you can avoid a down payment, qualify for a good rate regardless of credit score, or lower closing costs, it will make it easy to complete the buying process.
Which Type of Mortgage Rate Can You Afford?
A fixed mortgage is one consistent monthly fee throughout the entire duration of a loan, with the occasional fluctuation in taxes or insurance. The other option is to work with an adjustable rate mortgage that changes to a prime rate after the introductory period. It truly comes down to the preference of the buyer and their ability to afford paying for their loan. If you are interested in a lower fee in the beginning, an adjustable rate mortgage is going to offer more benefit that a fixed mortgage.
Can You Afford to Pay Additional Fees?
There are a lot of factors that go into negotiating a home loan, including the fees not included in monthly payments. Unless you qualify for a program that eliminates the down payment, you can expect to pay anywhere from 5% – 20% up front. Be careful to watch out for junk fees that lenders may tack on, such as charging to process the loan. Every lender is going to have varied charges that are worth comparing to find out which is the most affordable. Do not forget to look into the closing costs that are often negotiable if you ask.
If you are ready to shop for the best home loan, give us a call at 1-866-96-GMLAW so that we can help you find a lender to work with.