When buying a home, one of the most essential steps is finding an experienced mortgage lender. A knowledgeable lender will assist in getting you the best loan rate and explaining every step along the way so that you feel secure and excited about your purchase.
Steps to Take When Searching for the Ideal Mortgage
The initial and most essential step when searching for a mortgage is shopping around. Studies have demonstrated that comparison-shopping can save you thousands of dollars over the life of your loan. When researching banks, credit unions, online lenders or local independents, make sure you get the best rates and terms possible.
Comparing mortgages from different lenders on the same day allows you to accurately judge costs and fees. Furthermore, do your shopping within 45 days so that multiple inquiries on your credit report won’t have a detrimental effect on your score.
If you can’t afford a large down payment, consider applying for loans through the Federal Housing Administration (FHA) and other programs designed for low-income borrowers. These mortgages usually require smaller down payments and may have more accommodating qualification criteria.
Another effective way to secure a better rate is by working with an established mortgage broker who can shop your loan options with multiple lenders and provide you with expert analysis of your best choices.
The right lender should answer all of your questions, from how much money is necessary for the down payment and closing costs, to how they can help avoid foreclosure and re-financing in the future. They should also guide you through the home-buying process from beginning to end so that you feel confident in your choice and know what can be expected along the way.
A trustworthy lender should be friendly, honest and patient with you throughout the home-buying process. They’ll explain everything clearly and demonstrate how the loan procedure works without using complicated terms that might make you uncomfortable.
When applying for a loan, be sure to fill out the application as completely and accurately as possible. The more information you can provide, the easier it will be for a lender to approve your request. Be sure to include income documentation such as pay stubs, along with assets like bank statements for checking and savings accounts, retirement accounts and other investments.
Before speaking to mortgage lenders, it’s essential that you have a steady source of income. Make sure you have several months worth of tax returns and paycheck stubs ready. Additionally, set up an account for down payment funds where a certain amount can be put each pay period and automate the deposit so you don’t forget to do it.
Before approaching lenders, be sure to check your credit reports and score. At least once annually for free, these reports can identify any issues with your credit and help determine which types of mortgages would be most advantageous for your financial situation.