Since you're in the market for a new home, you're probably in the market for a new mortgage. Here are some critical shopping tips for anyone looking for a new loan.
- Know the Terms
All the terms of a loan matter. Unfortunately, shopping for a mortgage is not as simple as finding out how much a lender will let you borrow and at what interest rate. You'll want to get a complete breakdown of what any offer your receive means to you on a monthly basis as well as how much money you'll be spending over the life of the loan.
- Not all Mortgages are the same
There are several mortgage types available to residential home buyers. Most people will shop for a traditional fixed rate mortgage, but other options are available including adjustable rate loans (ARMs), Federal Housing Administration loans (FHAs), and Veteran's Administration loans. You'll want to be sure to understand what kind of loan a lender is offering you.
- Fees, Fees, Fees Loans have fees associated with them in additional to the principal amount borrowed to buy the home. You can sometimes borrow the money to cover these fees, but that will obviously increase the overall amount of debt you undertake. Some fees are paid up front, and others are not due until closing.
- Local Lenders know best
There are loans available online, and they might seem to offer a better deal than a local lender, but consider: a local lender knows the east bay housing market. On line lenders may not, and there's a big difference in home value from one area to another. Similar homes in different areas will appraise differently. A local lender knows these relative values better than one who lives outside the east bay bubble.
- Local Agents know local lenders
Why does that make a difference? Because good agents know that the deal is not just between buyer and seller, it also can involve the lender. The reliability of the lender can make all the difference in a smooth transaction. Seller's agents know who's who in local lending circles, and their experience with your lender may make the difference in accepting or rejecting your offer.
I have a list of reliable local agents I'm happy to send you and If you'd like to chat with me personally about how to shop for a mortgage and what other questions you can ask lenders to find the best deal, give me a call at any time. I'm happy to get you started on the right path so we can start looking for your new home!
Let's Get Moving!