5 Mortgage Secrets You'll Want To Know About
To get the best loan with the best rate and terms, it helps to know a few key things — especially since your mortgage is sticking around for the next 30 years!
Here are 5 'mortgage secrets' you’ll want to know about.
1. There are a variety of loan options available
Don’t settle for the first loan your bank offers—explore your options to find the best fit for your needs.
Here are the most common loan types to consider:
• Conventional Loan: Great for good credit and low debt-to-income.
• Jumbo Loan: best for borrowers buying a more expensive home
• Government-Backed Loans: These include FHA, VA, and USDA, and these loans are great for borrowers who have lower credit scores and/or smaller down payments
• Adjustable-rate mortgage: Ideal for shorter stays, lower initial payments, or plans to refinance later.
2. You can shop around for lenders without hurting your credit
Worried about multiple credit inquiries? Don’t be! During a 45-day window, multiple mortgage applications only count as one hard inquiry. Take advantage of this time to compare rates and terms from different lenders. Don’t hesitate to get quotes from multiple lenders, banks, and credit unions. Compare interest rates, APR, and fees to find the right fit.
3. The lowest mortgage rate may not be the best deal
Many lenders assume you’re only focused on the lowest interest rate, but there’s more to a good mortgage deal than that. Here’s what else you should consider when shopping lenders:
• Lender Fees (including points)
• Closing Costs – the fees associated with home-buying, including application fees, processing fees, etc.
• APR (annual percentage rate) – the APR includes fees and other costs, giving you a clearer picture of the loan’s true cost
4. A pre-approval isn't a guarantee
Many buyers think a pre-approval means their mortgage is a done deal, however final approval depends on factors like the home’s appraisal, your financial stability at the time of closing, and the lender’s final review of your application.
Tip: Choose a lender who thoroughly reviews your financials before issuing a pre-approval. It can save you surprises down the road!
5. You can recast your mortgage
A mortgage recast lets you apply a large sum toward your principal balance, reducing your monthly payments without changing your interest rate or loan terms.A great option if you’ve come into extra cash (like a bonus, inheritance, or proceeds from selling another home) and want to lower your monthly payment without the hassle or cost of refinancing. Have questions about the mortgage process? I’m here to help! Need a trusted local lender? I’ve got you covered. Just send me a message, and let’s chat!
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