Shopping to find a mortgage loan that is right for you might not have quite the same curb appeal as that house you’ve got your eye on, but it’s just as important. Before you get hung up on comparing mortgage rates, here are six other important factors you should consider when choosing a mortgage loan.
Find your personal mortgage shopper
The first thing you should shop for is not the loan itself, but your mortgage professional. Decide whether to work with a mortgage broker, banker, or credit union. Lenders, loan officers, and banks will each look at your mortgage application differently and offer you varying levels of assistance. You’ve got options, and that’s a good thing.
Consider customer service since applying for a loan requires substantial paperwork and collection of personal information. You’ll want to have a trustworthy, reliable point of contact to answer your questions, help you stick to deadlines, and navigate all of the documentation.
You can shop for a mortgage loan on your own, but mortgage brokers can help you do the legwork and save you time, money, and frustration. They are mortgage professionals who understand your local market and regional home loan requirements and can shop competitive home loan product options.
Know your own finances first
In order to choose the best home loan for you, you should do a quick check-up on your financial health. Understand how your income, employment, your monthly expenses, credit score, and financial goals all align.
After reviewing, set personal financial goals. Ask yourself what are your most important home loan considerations? Is the goal to have the lowest monthly payment possible? A low down payment? Do you want to have a low total amount of interest paid over the life of the loan? Or do you prefer to pay higher interest upfront to shorten the payment term? Your mortgage professional can help you determine loan product options based on your financial goals and navigate the potentially complex qualification requirements.
What do you qualify for? What you can afford?
Take some time to learn the difference between what you qualify for and what you can afford or what you are comfortable paying. A mortgage is a long-term commitment no matter how you spin it, so it is crucial to take your time and choose wisely. You may qualify for a loan that looks ideal but could crunch your finances in a stressful way in the future. Create a realistic budget and determine a comfortable monthly payment before you apply for a loan.
Look out for additional costs
Many homebuyers are hyper-focused on mortgage loan rates, but they fail to consider additional factors like closing costs and fees. Your mortgage closing costs can include things like property tax and mortgage insurance. Additional fees may include: application fees, appraisal, loan-origination, underwriting, broker fees, and settlement costs. Make sure to ask for an overview about these costs prior to choosing your real estate and mortgage professionals, and continue to review these costs throughout the process!
Keep your options open
What do you know about the six main types of mortgage loans? You may already have an idea of the type of home loan you want, but your mortgage professional might be able to offer additional options for consideration. What type of interest rate is best for you? Fixed rate or adjustable rate? How long do you want your loan term to be? The most common mortgages are 15-year and 30-year loans, but there are other options available.
Plan before you explore mortgage rates
Make a step-by-step homebuying timeline to make the mortgage loan and homebuying process easier. This will help you look at the bigger picture while also guiding small attainable goals so evaluating your mortgage options does not become too overwhelming.
The mortgage brokers in the Motto Mortgage office network are poised to help you navigate your home loan process. Reach out to your local office today.
Published on November 3, 2020
