Shopping for a good mortgage rate can sound and feel intimidating because of the many avenues you can take to find the mortgage of your dreams. A mortgage is often a long-term loan designed for homebuyers to purchase a home while making monthly payments. The mortgage is the best tool potential homeowners have of entering homeownership and getting on the property ladder.
While shopping for a mortgage has become a lot easier thanks to online tools for finding and comparing rates and lenders, there are still a few key things to know that remain timeless. Mortgages have been around for a very long time, and with all of that backtesting, there are some clear dos and don’ts one must watch out for throughout the process.
DO get pre-approved for your mortgage. This is the best way to know exactly how much house you can afford. If you go shopping for a house before you know how much mortgage you will be approved for, it is going to be a disappointment if the bank or lender does not approve your mortgage for your dream home. First, get pre-approved for the loan and then find the right home within your budget. You will also be able to make a more competitive offer when it comes time to negotiate, as you will have a pre-approval letter from the lender or bank that has verified any income, assets, and investments you might have.
Check Your Credit
DO check your credit score and make sure you understand your financial and credit situation. You should get a credit report from one of the credit bureaus and ensure that all of the information is accurate. You don’t want to apply for a mortgage and find out that something on your credit report is holding you back.
Hire a Professional
DO find someone who knows what they’re doing at each step of the process. You should contact a mortgage broker, your bank, or a loan officer that will be able to give you proper professional advice. They have seen it all before, and they will be the best person to guide you through the process.
DON’T accept the for rate offer you receive, as this might not be the best one out there. As a consumer, you have many options and should shop around for the best rates and offers from different lenders, including banks and mortgage lenders. Your rate will ultimately affect what you pay significantly, and you should pay attention to this carefully. Even if the offer is exciting, you should wait to hear all of the available offers out there before making a final decision.
Choose Right, Not Just Easy
DON’T just go the easy route and take a mortgage from your existing bank because it is more convenient. Your bank probably already has some mortgage rates and offers available to clients, and you have checked those out. Still, while it might be simpler to take a mortgage with your existing bank, you should shop around more before making a final decision.
Shopping for mortgage rates can be confusing and sometimes stressful. Hiring a professional and taking your time to make the right decision will make it more likely that you end up with the mortgage that works for you and the home of your dreams!