Do Your Research, Find an Experienced Loan Officer
A new home can be a big investment, even if you’re looking at a relatively modest structure. In fact, the initial terms of your mortgage are so important that they could shape your life for years to come. That’s why it’s so important to make sure you’re getting the best possible rate before you jump into home ownership. The following tips from an Illinois Loan Officer, will help you understand the financing process and obtain the perfect mortgage for your situation.
Understand your credit
Too many people rush into buying their first home blind. They may not bother to obtain a copy of their credit report before they ask about financing. Some do get a report, but don’t take the time to learn about it. If you don’t know what a potential lender is going to see when they check your credit, you could be in for a big surprise. Ask for your initial report about six months before you want to borrow. That gives you time fix mistakes on the report or start to repair problems that could affect your rate. If you see anything wrong, dispute the errors using the Federal Trade Commissions’ credit report dispute process.
Be on the Alert
Mortgage rates can change suddenly and without a lot of advance warning. If you want to take advantage of a surprise rate drop, you need to have your paperwork in order before it happens. Make sure that you have already had an appraisal performed on the home you’d like to buy. Be sure you have a copy of your previous two years of federal tax returns, as well as bank statements for the year or so. Other items, such as pay stubs and proof of debt payment, can also help you show that you’re responsible, helping you obtain a good rate very quickly.
Be Willing to Try Multiple Lenders
While your local bank is a convenient first place to check for good mortgage rates, it may not be the only place you should look. According to some Loan Officers, you need to understand what lenders are looking for and be willing to approach not just banks, but Credit Unions, Mortgage Brokers, National Lenders and private sources of funding. You may be surprised by the very different rates you are offered.
Getting an extremely good mortgage rate can seem daunting or even impossible, but it doesn’t have to be. As long as you’re prepared and go into the process with an open mind, you could potentially save thousands on the purchase of your new home. Just make sure that you have everything in order well before you enter the housing market, and you’ll be on your way to a smart decision and a mortgage you can live with.
By Jessica Calhoun