When it comes to buying a home, finding the right property or the best real estate agent to work with is only part of the equation. You will also have to pay attention to financial matters, such as getting your mortgage. Very few people are able to pay the entire cost of their home upfront and that means that you will need to apply for a mortgage. If this is your first home, you may be lost as to how to get the best mortgage rates and even those who have previously bought a home may need a refresher on the process. These tips can make the process easier and ensure you get the best rates.
Know Where You Stand Financially
Before you start talking to mortgage brokers, or even looking at homes, it helps to know your current financial situation. You should know your credit score and have minimized your debt as much as possible, including car payments, credit cards, and student loans. While looking at your credit score, do some math and figure out how expensive of a home you can afford to purchase, keeping closing costs in mind.
Compare Mortgage Rates
When it comes time to look for the mortgage, don’t settle for the first one you come across. Even if your friend, family member, or real estate agent says that the broker is the best in the business and did wonderful things for them, don’t be afraid to shop around. The extra effort you put in to compare mortgage rates could easily end up saving you thousands of dollars.
Ask About All Fees
The mortgage process is just like anything else in that in addition to the actual mortgage rate, there will be many fees involved in the process. Just some of the possible fees you may be forgetting about include the Loan Origination Fee and Mortgage Insurance. Always ask to ensure you know every fee that will be on the Good Faith Estimate from the lender.
Check On the Rate Lock Period
Mortgage brokers will offer some sort of rate lock period and this is basically the period of time for which they guarantee that you will pay the mortgage rate they quote you. You want to get at least a 60 day rate lock period as it will likely take this long for the loan to be settled. If your rate lock period expires, you will almost end up paying more.
Don’t Be Afraid To Ask Questions
If this is your first time applying for a home mortgage, then you will probably have many questions about the process or terms. If anything the broker or lender says confuses you, ask him to explain it. The best brokers will want you to fully understand the situation and won’t mind answering your questions. After all, it is important that you understand exactly what is happening when you are making such a large investment.
Pay Attention to Fine Print
Before you actually sign the mortgage, be sure to thoroughly read the entire document. Make certain that you understand everything on the document and that it reflects the numbers and terms you and the broker agreed upon.