Mortgage shopping is a phrase that may be unfamiliar to most.
When a couple or an individual is on the lookout to buy real estate, usually they tend to focus on the physical aspects; whether it be a cozy condo downtown, a private duplex, cottage or a modern house.
And when they see the right one, it’s like their heart stops and they know in an instant that’s the one they want. It’s much like being with the right person you want to spend the rest of your life with or just like anything you’ve worked towards for so long–you’ve spent a lot of time and effort to get what you know you deserve.
This is very true for a home, but this also rings correct for your mortgage loan. The home of your dreams can be accomplished by getting a mortgage.
In that sense, you’ll also need to spend time and effort to look for the right mortgage that’ll work best for you and your finances.
1. Know your budget
Hold your horses! This is a huge chunk of the equation when you’re in the process of homebuying. You may have an amount in mind that you want to work with, so when your desired home pops up you’re ready to take action.
However, you also need to be aware that along with the price of your home and your monthly mortgage repayments, there are also closing costs, appraisal fees, mortgage insurance, property taxes, etc. that you need to include in your budget.
It’s very crucial therefore that you know your number.
2. Partner with a trustworthy Mortgage Broker
Swimming through the sea of brokers can be overwhelming. When a lender smells your inexperience a mile away, they can charge you higher rates or include hidden costs which you may not be aware of; some of them might even use mortgage jargon to impress or confuse you.
Having a Mortgage Broker that knows the ins and outs of the industry that’s experienced and trustworthy, as well as recommends lenders that are a good fit for your individual situation will ease your burden and take a whole lot of the load off your back!
3. Review your Credit Score
Knowing from the beginning whether you’re qualified for a loan would really help the process go smoother.
You’ve heard time and time again the importance of a credit report. This will dictate if a lender would even consider taking you on as a potential client.
Other factors that lenders will investigate are your income, job stability and borrowing history.
To know more about your qualifications as a homebuyer, read the 6 Warning Signs That You Can’t Afford A Mortgage.
4. Set your parameters
Once you’ve discussed your budget, preferences and limitations with your Mortgage Broker, they can recommend to you the lender that works best for you.
After which getting various proposals from lenders would be easier to navigate. Since you already have set parameters of what you’re looking for, you can identify the pros and cons of each lender.
5. Do a microscopic review of the proposals
When we say microscopic review, that means that you must be aware of the fine print in the loan proposals that has been offered.
Why is this important? As they say, ‘the devil is in the detail’. It may seem like one proposal is better than another because it has a lower mortgage interest rate; but in hindsight, they may charge higher fees. If you sum it all up, lenders with higher rates but lower fees might be more cost effective.
Prepare yourself to be detail-oriented and open-minded when shopping for a mortgage.
6. Check online reviews
As a homebuyer, you’ll want to check into the background of the lender that you’ll be dealing with. Yes, they may seem credible, but it’s still wise to do your own research. Take advantage of the internet and check for reviews and feedback.
How fast can they process your loan? How true are they when they give promises to their clients? You will be dealing with your lender until you finish paying off your mortgage, therefore knowing more information about them is just doing your due diligence.
Search for their website, check reviews and testimonials. Remember, you always need to protect your interests especially when entering a mortgage loan because it’s a long-term commitment and may be the largest purchase of your lifetime.
In the end, when you follow these tips when shopping for your mortgage, not only will you save money, but also you’ll begin your journey with peace of mind. Knowing you made the right choice with your mortgage broker is a huge confidence booster!
Daisy Raouph, CLU, CHS, specializes in mortgage financing solutions and financial services. A Mortgage Broker and Financial Security Advisor with over 30 years of experience in financial services. Contact us today to review your mortgage financing options. We can help!