Buying a house is one of the biggest financial decisions most people will ever make. We’ve put together a few tips from people who’ve done it successfully.
Get multiple quotes from multiple lenders without multiple credit inquiries or hard hits to your credit
You can improve on your interest rate by having your application shopped across multiple lenders, but not having your credit run multiple times. This is very easy when working with an independent mortgage broker. Since the independent mortgage broker is working on your side. They take your loan application and when the independent mortgage broker runs your credit they can then shop with multiple lenders to get multiple quotes giving you the best options.
Lenders are aware you’re applying for loans with more than one lender when you’re working with an independent mortgage broker, who submits your loan applications.Since the Independent Mortgage Broker WORKS for the CONSUMER and NOT the LENDER, they have several choices from where they ultimately send the loan to. Since the lenders are getting a lot of business from the independent mortgage broker they are likely to be more diligent in responding to your application. Also, the very lowest mortgage interest rate may not be the very best choice for you. Working with a knowledgeable independent mortgage broker who can apply with multiple lenders will also give you a good idea of which lender is the best communicator and best to work with overall for your unique situation. Since different lenders are better for different borrower situations.
Such as quick fast closing timelines, streamlined limited paperwork, for situations where time is of the essence. Or other lenders that may provide the rock bottom cut throat discount rates but require a ton of paperwork and letters of explanation and extensive income documentation, those lenders may be a good option if the borrower/consumer is not in any hurry and can afford to delay a closing and is willing to come up with all the needed paperwork. So working with a mortgage broker helps the consumer navigate the sea of lenders and loan product choices out there. If you’re concerned about multiple credit inquiries reducing your credit score, this is also why a mortgage broker is a great option since this reduces multiple inquiries on your credit report. With the single credit report run by a mortgage broker that broker can shop your loan with dozens of lenders, without any additional credit inquiries or hits to your credit report
Lock in your home loan interest rate for the longest-possible time needed
You may not have even heard the word “escrow” before you started looking for a home to buy, but it can last longer than you may think. When you’re applying for a loan, go ahead and lock in the rate for the longest time your lender will allow, depending on the situation. You don’t want to be surprised with a higher interest rate and higher payments at close of escrow should interest rates go up while you are floating. It’s also best to get your Realtor Real Estate Agent introduced to your Independent Mortgage Broker earlier on in the home buying process. When they are both on the same page things run smoothly. You may be able to out negotiate other buyers and get that home you really want, since your Realtor would know from the Mortgage Broker how quick they can close. This would help when writing the purchase offers, since your agent can offer the seller shorter contingency time frames, where your loan can close quick with a shorter escrow, making you stand out above the competition of other home buyers.
Keep your mortgage payment under or close to one paycheck
This is one of the simplest forms of mortgage advice and overall, most reliable. No matter what the future holds, you can plan financially to manage a mortgage payment that equals one paycheck (if you’re paid weekly). If you have a two-income household and are paid twice a month, the same advice holds true.
Sign for a mortgage that will let you save for retirement
Think about how you will best be able to save and invest your money. If your mortgage payment will allow you to save $1,000 a month and you can invest it at an average rate of 6%, you’ll build up a substantial retirement fund. Even if your home increases in value, chances are you’ll have a more secure retirement if you allocate your money this way.
And finally, get preapproved for a mortgage before you start home shopping. Few things are more frustrating than being uncertain of how much you can offer on a home, and losing the home you really want to a buyer who’s been preapproved and is prepared to make a better offer.