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.
1. Use professionals. 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. By aligning yourself with a professional Coldwell Banker realtor and experienced lender you ensure all the financial steps are taken care of properly and economically.
2. Utilize a lender with established ties to an Coldwell Banker agent. Lenders are much more flexible with the real estate agents who have done business with them previously. Their relationship establishes them as a team member. The lender and agent work effectively together. 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.
3. Don’t attempt to do the 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 lender explain and help you with all the paperwork. Ask questions of your team, your lender and Coldwell Banker agent. Their expertise will help alleviate your stress and prove to be invaluable before you sign your mortgage.
4. Look at all your options. Make sure you see at least 3 loan programs for your mortgage. Lenders have 5-7 programs and should work with you and your Coldwell Banker agent on deciding what is best for your circumstances. Evaluate all your options. After all, it’s your money you’re spending – not theirs.
5. 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 accommodate your needs. Don’t let the process become so intimidating that you lose that understanding.
6. Stay in complete touch. You should receive a written report from your lender at every step. This will ensure that no details are overlooked and there will be no surprises.
7. Be careful with flexible loans. 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. Be sure and check prepayment penalties.
8. 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 Coldwell Banker agent. Many times, special circumstances, when explained properly to the person in charge, will win you the loan. Beware, though, of overextending your finances.
9. Don’t wait for the bottom of the market. The odds of your hitting the bottom of your market are about like the odds of you hitting a 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.
10. Be honest With your lender. Your lender wants to help you with your loan. The only time he/she gets paid is when you get approved and the loan is funded. The more information (good or bad) you provide your lender, the easier it will be for him/her to get an approval. It helps to present the loan in the best light and get the highest approval rating.
11. Become 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, because he/she understands all the up-front work will pay off in future business.
12. Don’g just get Pre-qualified, get pre-approved. Lenders will provide you with a certificate of pre-qualification. By getting pre-qualified, 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 Pre-Approved is even better, then all you need to find is your property.
Use your Coldwell Banker agent as a resource through the entire process of applying for and getting a mortgage. He or she is the best place for answers and guidance when you decide to invest in real estate.