All You Need To Know About Shopping For A Mortgage
If you’re looking to buy a home for the first time, there’s a good chance that you’re an amateur when it comes to shopping for the right mortgage. You may have heard terms like 30-year fixed and adjustable rate mortgage thrown around, but it still makes sense to do some research ahead of time, as a home loan is likely one of the largest financial investment you’ll make in your lifetime.
What Are Your Goals?
Be clear about your home-buying goals and what makes now the right time for you to buy. Some people are looking to buy an investment home, while others may want a home to start a family. Also, narrow down the area that you want to live in to get a sense for market pricing.
Prospective buyers should start talking to real estate agents, family and friends to learn about their experiences. It’s a great way to help you learn about specifics to your area, such as the type of insurance required and average cost of utility bills.
You don’t have to have previous knowledge about what the housing market is doing because your mortgage lender and your real estate agent should be able to tell you about that. But, you do need to know your numbers and how large of a down payment you’re comfortable making and the amount of your monthly payment.
Check Out Company Profiles
The shopping process really comes down to finding a company and mortgage lender you trust. You need a certain level of comfort and confidence in a company’s track record of customer service.
To ease your mind, look up the Nationwide Mortgage Licensing System (NMLS) number of the mortgage banker. Each banker and firm in the industry has a unique number assigned by the NMLS. This trackable number helps to improve transparency in the residential mortgage market from state to state. This information can be found at: www.nmlsconsumeraccess.org
Mortgages are available from several types of lenders, including commercial banks, credit unions, banks and mortgage companies. These institutions likely offer different interest rates, promotions and loan options.
Consider Mortgage Types
When considering the type of loan you’ll need, consider how long you plan to live in your new home, along with your credit and the amount of funding you’ll need.
The three most common mortgage types are standard Conventional mortgages, VA loans for military active duty and veterans and loans offered through the Federal Housing Administration, also called FHA loans.
A Conventional loan can be offered as a fixed-rate mortgage or an adjustable rate mortgage, also known as an ARM and usually offer the best loan terms, but can be more difficult to qualify for.
A VA loan is a loan for active military members and military veterans that allows for 100% financing and more flexible requirements than Conventional loans.
An FHA loan typically has easier borrowing requirements, such as low down payment, lower credit score requirements and more flexible income requirements.
Contact First Ohio Home Finance to learn more about the home buying process, including first time home buyer programs and down payment assistance!
