One of the most important things to remember when buying your first home is your budget. We have written a lot about budgeting and sustainable homeownership. We want to emphasize the importance of not overextending yourself. Buying too much house with too little budget can lead to many problems.
Shopping around for your mortgage can save you significant money on your loan costs. Here are four key rules for comparing lenders and loan products.
#1. Get Three Quotes
Loan terms and mortgage interest rates can vary from lender to lender. A 2016 study found more than 75% of mortgage seekers applied to only one lender (source: Office of Reserach of the Bureau of Consumer Financial Protection).
Shopping for a mortgage loan can save thousands of dollars, upfront and over the lifetime of the loan. Remember, shopping for a home loan is like shopping for a car. Don’t be afraid to negotiate.
Remember to ask each lender to write down all costs associated with the loan. When you have everything written down it will be easier to compare and negotiate.
#2. Google is your Friend
Do you remember when you had to find a pediatrician for your first child or a veterinarian for your new fur baby? Google became your best friend.
There is a reason why so many people turn to search engines to research service providers. Online reviews and social media is an easy and efficient way to gather information. Most lenders link their personal website to their social media.
Once you’ve found their profiles you can search for reviews. You will also be able to see the products and services they offer.
#3 Communication is Key
Even after taking the First Time Homebuyer class, you may have questions about the mortgage process.
Communication is key when it comes to the mortgage industry. You will want to find a mortgage lender who can communicate with you the way you prefer.
You may like a more personal touch with in person meetings and phone calls. Or you could prefer a more tech savvy approach, preferring emails and text messages.
A good loan officer can communicate in a variety of different ways so you feel at ease and can close on time.
#4 Sharing is Caring
It is always nice to receive a referral for a mortgage lender from a friend or family member. Even better is a referral from a real estate agent.
Agents do more than help you find your perfect home, they also work in the communities that they service. They hear about experiences clients have with lenders and other service providers.
Agents also know which lenders work with down payment assistance programs and speak your preferred language. Cross checking any referrals you receive will help you find a trusted lender.
You could be spending more on your monthly mortgage payment than is necessary if you do not shop around. Spending a little extra time now can give you peace of mind knowing that you got the best mortgage for you later.
As always, we encourage you to sign up for Avenue's First Time Homebuyer Class. If you have already taken the class and still have questions, please give us a call at 713.864.9099.