Home Financing FAQs

Where should I shop for home loans or mortgages?

Always have a pre approval letter for your financing to present when you make an offer on the home. This makes your offer stronger!

With all the choices out there, shopping for a mortgage can seem like an overwhelming task. There’s good news, however: Despite the many choices of where to get loans (banks, credit unions, savings and loans, insurance companies, and mortgage bankers) their offerings are pretty well standardized, in order
to comply with government rules. (The Federal National Mortgage Association or “Fannie Mae,” as well as other quasi-governmental corporations, set these rules asMoney Questions a condition for buying loans off the lenders.) What’s more, some of the creative mortgage variations that were available before the real estate bubble burst have gone the way of the dodo bird. No more stated income is a prime example. You might ask you Realtor who they work with as they will have several mortgage brokers that have gotten them successful loans for their customers. A Realtor will not recommend a mortgage broker that has not gotten a loan thru or who seems to not have the knowledge to complete a loan. The Realtor wants to make the sale go thru for their customers and will always use only those mortgage brokers that have been able to preform in the past.

Start by deciding what type of mortgage you’re interested in. The main choices are between a fixed rate and adjustable rate mortgage, though some hybrids of the two are still available. Once you’ve narrowed your sights — for example, to a 30-year fixed term mortgage for $200,000 — you’ll be ready to compare
apples to apples.  At that point, you can either start looking at mortgage rates yourself or go straight to a mortgage broker. Mortgage rates and fees are usually published in the real estate sections of the newspapers and on mortgage websites. Realize, however, that the published rates assume that you’ve got stellar credit and a good income — anything less and you’ll pay more to borrow money. It’s wise to do some advance research even if you decide to work with a mortgage broker, so that you’ll have a sense of the market. Some mortgage brokers charge the consumer directly, others collect a fee from the lender (though this ultimately adds a little to what you pay for your mortgage).  Finally, don’t forget private sources of mortgage money — parents, other relatives, friends, or even the seller of the house you want to buy. Borrowing money privately is usually the most cost-efficient mortgage of all. And its popularity is increasing as credit tightens.

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