4 Steps To Shopping For A Mortgage

Shopping for a Better Mortgage

Today let us discuss one of the most important topics in shopping for a mortgage experience. If you are putting efforts to do research before buying a new car, a television, a mobile phone or in something as simple as shoes, we suggest you put even more effort to shop for a mortgage. When it comes to the mortgage you need to make sure that you have the best one according to your needs. So below are a few steps to shop for the best mortgage deals.

Marking Your Goals

Identifying your goals would be the best bet when you are opting to buy a new house or planning to refinance your existing home. Ask yourself, how long are you planning to stay in the house? Are you planning to pay off the mortgage and build equity? Or are you refinancing to get a lower interest rate? These questions will help you identify your goals and help you select the loan options accordingly.

Selecting Tenure and Type of Rate

If you are looking to buy a new home or refinance your existing mortgage it is very important to know which tenure you need to select. You might get options starting from 5 years to 30 years, most commonly used are 15 years and 30 years. The longer the tenure the interest rates are higher. You might also need to determine whether you need an adjustable-rate or a fixed one

Selecting the Lending Institution

Once you finalize your goals with the selection of right tenure and the type of rate, you might want to select the right financial institution to get this loan done. You have 3 options to select –

A mortgage broker, a bank or a credit union. A mortgage broker might give you flexibility on the loans because they are tied up to many lenders and could help you find the best match to your criteria.

A bank could be a good option as well especially when you have a good relationship with one.

A credit union might give you additional benefits in terms of special perks like low-interest rates and lower fees.

Asking Questions

While you are in the process of selecting the best financial institution for your mortgage loan or a refinance it is advisable to ask as many questions as possible to the loan officer. You might want to know how much their underwriting, origination or servicing fees are so that you can shop for the best one and save money.

check if they are charging any points. If they are you might want to understand the terms for the same and see if it is beneficial for you. Ask about would be the interest rate. Determine how much you are going to pay for the tenure of the loan. Ask your loan officer is if there are any pre-payment penalties attached to your loan.

Ask if any other requirement like – kind of documents they would require, your assets, liabilities, your tax returns, credit score to qualify, down payment if you are buying a new home, income documents, your work history, etc. Asking about these would not only give you a better understanding of shopping for the mortgage but also anticipate what documents to be prepared with.

It is very important that before you finalize on your mortgage you may want to make sure to shop as it could help you save a lot of money in the long run.

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