If this is your first experience shopping around for your mortgage, the entire process can be very confusing. Unfortunately, if you don't do your research, you might wind up with terms you don't understand or a mortgage that you cannot afford in the long run. Here are a few simple dos and don'ts to keep in mind when shopping around for a mortgage lender.
Do Understand Your Finances Before Shopping for a Lender
Before you contact any potential mortgage lenders, gain a better understanding of your finances and how much house you can afford. For example, contact all three credit bureaus and obtain your individual credit reports and credit scores. Check for any inconsistencies, including charge-offs and credit cards or loans that you do not recognize.
If you believe there is a false charge on your credit report, you can dispute the charge. Be aware that if you dispute any charges on your credit report, it can take weeks to resolve the issue. Once the credit report is fixed, and your credit score is correct, you can start searching for lenders.
Don't Forget to Consider the Loan Terms
Mortgage rates are constantly fluctuating and the higher the interest rate, the more you will pay monthly for your mortgage payment. However, the mortgage rate is not the only term of the loan you should consider. There are other factors, including application fees, loan origination fees, processing fees, and closing costs.
All these terms will impact the mortgage costs, so make sure when you find a mortgage lender and before you sign on the dotted line, you understand how much money you will be spending on your next home.
Do Ask for Several Mortgage Quotes
There are several lenders available, both in person and even online, so make sure that you contact several before making a final decision. You can work with a bank, credit union, or an independent mortgage lender or broker. Whatever choice you make, never choose the first lender.
Instead, compare the quotes from a variety of lenders. Consider the length of the loan, the APR, the associated fees, and closing costs.
Don't Hesitate to Ask Questions If You Are Confused
Finally, if this is your first mortgage, don't hesitate to ask questions. Buying a home can be an overwhelming and confusing process. The last thing you want to do is to get over your head in a home that you cannot afford or with loan terms you cannot be comfortable with.
From asking for several quotes to considering the loan terms offered by each lender, there are several dos and don'ts to keep in mind while shopping around for a mortgage lender.
For more info, contact a local company like Clift Enterprises Clift Mortgage.