While mortgage shopping may not be the most fun shopping that there is, there is a strategy that you need to be aware of – especially to avoid having your mortgage fell through on closing day. Many first-time buyers make the mistake of going with the first lender that they come across. This can be a mistake. Comparison shopping is always a good decision and since your house is probably the biggest purchase you have ever made it’s a good idea to check around.
Here are some tips on how to shop for the right fit and avoid mortgage fell through on closing day
- Start the process early
When you are shopping for a mortgage you want to start the process early. The types of loan programs that are available to you will vary greatly based on your needs, including your credit score.
If you start the process early enough and find out that you have an issue it will give you time to correct it before having your mortgage fell through on closing day
- Always compare the rates
Mortgage rates are not a one-stop shop type of deal. The rates will vary from one lender to another and one program to another.
The higher your interest rate is the higher your monthly mortgage payment is going to be. Even a slight difference in the rate can cause a large difference in the amount that you will pay of the life of the loan.
And, don’t forget that rates can change by the day. So talk to your lender to see what your options are for locking in the rate for a period of time.
- Consider the closing costs
Closings costs are not the same across the board. There are some fees included in the closing costs that you can’t do anything about. They might be required and set by the state or local government.
However, there are some things in your closing costs that you might be able to negotiate on. For example, the price on things like appraisals and home inspections can vary based on what company is providing the services. Make sure to talk to several lenders to compare what their estimates are.
- Look for the program that fits your needs
Most homebuyers tend to think of the traditional 30-year fixed-rate mortgage. However, there are times when that type of a loan does not make the most sense.
Look into different programs to see what’s available and then run the total costs involved based off what your plan is for the property and the future. You may find that a 15-year mortgage or an adjustable rate mortgage is a better fit for your circumstances.
Never talk to just one mortgage lender. Different lenders have different rates, access to different programs, and you may just enjoy working with some more than others. Make sure to compare the lenders on all fronts to find the lender that is right for you. They can save you money, save you time, and may even have good connections that you want to know about once you own your home.
