Do Your Homework Well Before Shopping for a Mortgage

Houses and mortgagesTake the time to find the best mortgage that will save you money in the long run

If there’s one thing that most mortgage seekers look for, it would be finding the best mortgage deal in town. Since finding one can help you save thousands of dollars over the life of the loan, it would really be in your best interests to do your homework before settling for one.?

Tips for finding the best mortgage

Know your limits. Before shopping around for mortgages, you need to know what you can afford to pay for a home. Keep in mind that aside from the mortgage, you also need to pay for the insurance, property taxes and monthly maintenance of your new home. Aside from all these factors, you also need to set aside money in case of emergencies. If you need some help in determining whether the cost of buying a new home fits your monthly budget, consider using an online mortgage calculator. ?

Check your credit report. A higher credit score may translate to a lower interest rate so it definitely pays to check whether the information on your credit report is accurate.

Do comparison shopping. While shopping around for a mortgage can be quite tedious, you can possibly save thousands of dollars in the process. So, consider checking commercial banks, mortgage institutions, thrift institutions and credit unions to see which one offers the best rates.?

Shop online. Finding the best mortgage by doing an online search often yields better results since most mortgage lenders honor the terms stated on their websites rather than those quoted by lenders or brokers over the phone.?

Check to see if you are dealing with a broker. There are times when you may not know if you are dealing with lenders or brokers so do not hesitate to ask if a broker is involved. Remember, while a broker can provide you with more choices, you will eventually have to pay for the services. You should also consider the fact that brokers will not do all the work for you so you still need to do the shopping yourself if you want to find the best mortgage.

Compare the features. Ask around to see whether the available loan options have fixed or adjustable interest rates, and if you have to pay a penalty for paying the loan off early or make a large payment at the end of the loan. Get to know the annual percentage rate (APR) and settlement costs as well. Consider using a mortgage shopping worksheet to easily compare all these features.?

Ask for help. Since drawing a mortgage loan can be one of the most critical financial commitments you will ever make during your lifetime, it will be in your best interest to consult a housing counselor or a real estate attorney before signing any documents.

Finding the best mortgage deal can really be quite a challenge but you will definitely gain an advantage if you do your research well ahead of time.

Do you want to add some more tips and suggestions to this list? If you do, then please feel free to do so! We always appreciate hearing what our audience has to say.