Shopping for mortgage is a serious business. Individuals have to remember that once they avail of a mortgage, they will be bound to it for the next ten years or so. Hence, it’s crucial to find an offer that a person would be comfortable in. That being said, following are 4 useful tips to help you shop for a mortgage.
Know the Current Interest Rate
Individuals should first find out exactly how much the market interest rate is. This will serve as the basis for browsing through different lenders and talking with them to allow the possibility of a decreased rate. This can be done by browsing through the internet or perhaps checking out the newspapers. Ideally, homeowners should find out the interest rate for different lengths of loan such as 15 years, 20 years or even 30 years.
Know the Down Payment
Most lenders today ask for about 20% of the home’s value for down payment so make sure to find out how much it would cost exactly. The good news is that 20% is not fixed so shoppers have the option of lowering it down or perhaps looking for other providers for their loan. Of course, the cost of the down payment also varies depending on the length of the loan so it is always a good idea to ask this from the lender.
Browse AND Compare
The great thing about shopping for mortgage nowadays is that it can be done using the internet. Take advantage of this fact and start sending inquiries to different lenders, asking from a specific loan type and the length of the payment. Individuals have the option of going for a fixed or variable interest rate. A fixed one means that the individual would be paying the same amount every month while a variable type means the payment may go up or down depending on the market. Ideally, borrowers should obtain as many quotes as they can, at least 10 would be a good starting point. From there, a thorough comparison should be made between the mortgages before slowly dwindling down the list to match the person’s requirements
This is probably the most important. Lenders can be very flexible when approached properly. Hence, borrowers should make sure that they try to at least introduce their ideas on to the table and see if the lenders would be willing to adjust to their needs. This is why having a basis or browsing as many lenders as possible is important. This lets the borrower know how low they can negotiate to their chosen lender. At the same time, they will know exactly how much the highest interest rate is and therefore be informed if the lender is asking too much from them.
Of course, there aren’t just 4 useful tips to help you shop for a mortgage. There are other strategies out there that individuals can use to finally get the home they want without having to rob the bank for it.
By Madeline Samuels