The
right or wrong decision when signing your home mortgage
can mean thousands of dollars difference in interest
paid. There are very important considerations to evaluate
before you commit to a 15 or 30 year note. For many
of us our mortgage payment is the most important financial
decision we’ll ever make. Doesn’t it make
sense to know as much as possible about the financing
of our home? Take the time to thoroughly investigate
all of your options!
Unbelievably, many of us sign the first mortgage placed
in front of us. Typically the excitement of the new
home purchase reduces the mortgage to not much more
than an afterthought. What you read here could save
you hundreds or even thousands of dollars. Your real
estate professional has established relationships with
the top lenders in your area. By aligning yourself with
a professional agent you ensure that all the financial
steps are taken care of properly and economically.
1. Utilize a Lender With Established Ties
to an Agent- Lenders are much more flexible
with the real estate agents who have done business with
them previously. This relationship then establishes
them as a team. The lender and agent work effectively
together, referring each other business. That’s
why a good agent can make substantial difference in
setting up the most economical financing. And the right
financing can, literally, save you tens of thousands
of dollars over the life of your loan!
2. Don’t Attempt Paperwork Alone-
All the paperwork required to complete the purchase
of a home can be quite intimidating and frustrating
for a home buyer. Make sure you have your lenders help
you with all the paperwork. Get help from your team,
your lender and agent. Their expertise will help alleviate
the stress and it will prove to be invaluable before
you sign your mortgage.
3. Look at All Your Options- Make
sure you see at least 5 loan programs for your mortgage.
Lenders have at least 10 programs and should work with
you and your agent on deciding what is best for your
circumstances. Evaluate all your options. After all
it’s your money you’re spending - not theirs!
4. Demand Service- There is little
difference between a bank, savings and loan, or a mortgage
broker when it comes to the competitiveness of their
loan rates. The difference is in the service they provide.
It is their job to serve you! You want to get the loan
approved and move into your new home as quickly as possible,
but don’t overlook the fact that you are the one
spending the money and they are the ones who should
cater to your needs. Don’t let the process become
so intimidating that you lose that understanding.
5. Stay in Complete Touch- You should
receive a written report from your lender about every
step. This will ensure that no details are overlooked
and there will be no surprises.
6. Negotiate a Flexible Loan- Don’t
just accept the terms they lay down in front of you.
Lenders are in the business of loaning money and they
want your business. Make sure you examine every option
available to you. If you negotiate a variable rate loan,
many lenders have the ability to move you into a fixed
loan if rates start going up. Make sure that you understand
whether or not that is an option in the package you
are looking at.
7. Don’t Give Up on the First No-
Initial decisions are not always final decisions. Going
to a higher authority can sometimes get you the loan,
but do so with the assistance and compliance of your
lender and agent. Many times special circumstances when
explained properly to the person in charge, will win
you the loan.
8 Don’t Wait for the Bottom of the Market-
The odds of you hitting the bottom of your market are
about like the odds of you hitting your state lotto!
You will almost never hit the bottom of a market. And
trying to time it exactly right is often costly. It
usually causes a person or family to miss out on the
opportunity to purchase a very nice property. You’re
better off simply negotiating the best rate and terms
you can at the time you find a property. If interest
rates go down, you can refinance. This is a much better
approach because you won’t miss out on the property
you’ve spent so much time locating.
9. Be Honest With Your Lender- Your
lender wants to help you with your loan. The only time
they get paid is when you get approved. The more information
(good or bad) you provide your lender, the easier it
will be for them to get an approval. It helps them present
the loan in the best light. This in turn helps the loan
get the highest approval rating.
10. Become Completely Educated- Pick
your lender’s brain. Lenders will teach you all
about your various options, even if you haven’t
found the right property yet. They will be very patient
with you while you are looking, especially if you have
aligned yourself with the right agent. They understand
all the up-front work will pay off in future business.
Your agent will then continue to refer people to the
courteous and service-minded lender on down the line.
11. Get Preapproved- Lenders will
provide you with a pre-approval letter. By getting preapproved
you know exactly what financial parameters to stay within.
Your agent and lender will consult with you and help
you get qualified for the loan that best fits your needs.
Many times they are able to get you a larger loan than
you may have thought possible. Getting approved for
a loan is often times much easier than you might think.
We sincerely hope this brief report has been a help
to you.
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