Are you considering purchasing a new home? Do not do anything until you learn more about your options.
If you are in the market for a new home or a mortgage refinance, do not do anything until you understand a bit more about how creditors operate and the home buying process. There are several things to consider when looking for your home loan, and a number of them may not be what you want to hear.
• Not All Lenders Have Your Very Best Interest in Mind
All creditors will make one thing quite clear to you -- they want to make your house loan purchase fast and easy. While this makes for great advertising copy and even sounds great on the surface that really isn't what you as a potential homebuyer must hear. Bear in mind that when you are searching for a fantastic loan deal, it is ideal to take your time, ask lost of questions, and ask those same questions for as many different lenders as you can. You'll be amazed at the various items that companies, and even individual agents in the same company, will provide you with. In addition to obvious things like interest rates, how much you qualify for, and what your payments will be, make sure to ask about points, closing costs, agent fees, and all additional fees that will be added on the total price of your loan. Most companies prefer to add in fees for any number of items after you have already been approved for the loan and started the procedure. That's when they will add in transaction fees! , filing fees, or any other costs that most individuals do not take the time to ask about. Many times these charges will be added on the principle mortgage amount, not the final prices. It may not seem like a lot to finance an extra $2,500 dollars in addition to a $100K loan over the span of thirty years, but do you really want to provide that agent more of your hard earned money for nothing? As soon as you find out all the details and exactly how much your mortgage will cost, with all extra fees included, check the paperwork to make sure everything looks the way it should. Just because they tell you something over the phone does not mean it will not still be slipped in on the back page of your mortgage packet.
• Know the Differences between Different Loan Options
Make sure you learn about all the different kinds of loan products that are available to you. The difference between a 30 year fixed rate loan and a 30 year adjustable rate loan is more than just an adjustable interest rate. Learn what everything means, and what is going to happen if things change in the future. Often time's companies will allow you to purchase an adjustable rate mortgage with the option of turning it to a fixed rate later on down the road. Some companies offer interest only loans, where the only amount you are expected to pay for the first couple of years will be the interest on the loan. This option can be helpful when you have a property in your mind that you know you want, but you can't afford. Simply go this route if you are 100% convinced that you'll be generating sufficient income in the very short future to pay more than just the interest on the loan. Sometimes companies will qualify you for a loan of the kind even in the event that you can't afford the interest and principal combined. Should you get qualified in this manner, make certain you'll be able to make the payments in the long run.
• Learn About the Home Buying Process
Ask people you know who have already purchased their houses what issues they ran into during the procedure. Learn about any openings they had, or if they were happy with the people they worked with and the loan they obtained. A good deal of mortgage companies want you to know the exact property you are interested in purchasing, and if not the exact property some specific details about what you are searching for. Learn about home values in the area where you are searching, and see if you can get an old appraisal for your home online. If you do a little searching on the world wide web, you can usually learn a lot about the particular area you are searching for. Search for items like crime statistics, average earnings, the predominant property type and the average home value. You can type in the exact address you are looking at and many times you'll learn some very detailed information about the property. Consider doing a search for the MLS listings in your area. MLS stands for multiple listing service and is a kind of industry standard the professionals use to locate information about properties for sale and also the areas where they are located.
Purchasing a new home can be one of the most exciting and challenging things you'll ever do, but by finding out what you can about the process and the variables involved in you can better prepare yourself. By doing a little research and anticipating what to expect during the home buying process you can save yourself a huge amount of money, time and sleepless nights knowing that you have all of the information you want to make the best choice you can.