You should never settle for a mortgage you don’t really want. With good credit, low debt to income and ample reserves, you probably have more options than you realize. Even with the reduced number of loan programs you still have the ability to select your rate, term and negotiate closing costs. This starts with having some understanding of what you want and if you have the ability to get it. From there you need to do some legwork and work with the right people to make it happen. Here are three tips to help you get the mortgage you really want.
Shop around.When you are looking for financing, you need to shop around. Your new home is one of the biggest purchases you will ever make and you need to treat it as such. Depending on your situation a big bank could offer the best financing for you. In other cases a local mortgage broker with access to unique programs makes more sense. The bottom line is that you should talk to at least three different lenders before making a decision. Not only are you looking for the best program but you are also shopping rate, terms and the ability to close your loan quickly. Lenders are now required to provide a fee worksheet at the start of the process. This allows you to compare apples to apples and work with the lender you feel most comfortable with.
Rate lock. All buyers want to get the lowest possible interest rate. The lower the rate the lower the monthly payment. However you need to be careful in playing the rate lock game. Generally speaking interest rates tend to rise much quicker than they will go down. These rates can and do change every day and in some cases multiple times a day. With a small shift in the bond market or some other unexpected change your rate can rise over a quarter point in one afternoon. Instead of waiting for the exact perfect time to lock do so whenever you are comfortable with the monthly payment. You may miss out locking at the absolute floor but you will regret it more if rates shoot up unexpectedly.
Do your part. To get the loan you really want you also need to do your part. Your loan isn’t completed until you are at the closing table. If you open up new lines of credit or miss a credit card payment it can cause your loan to be rejected. It is important that you follow the terms of your loan approval all the way through the process. A day or two before the closing the lender will verify the credit score and call your employer to make sure you are employed. If anything has changed from the time of the original application your loan will be denied. Don’t let a foolish mistake get in the way of the loan, and property, you really want.
Getting out of a loan you aren’t comfortable with can take you 30 years or thousands of dollars to refinance. Use these three tips to ensure you close the mortgage you really want.