Buying a new house is a major step in your life… and it can also be a major debt that shouldn't be taken lightly. To save yourself both time and money, it's important to keep your need for a mortgage in mind during the entire process of finding and buying a new home.
Careful consideration of potential houses and shopping around for a mortgage lender can not only help you to find the right house for you and your family but can also help make sure that you're not paying more in interest and fees than you absolutely have to.
Here are some helpful hints to assist you in finding the house that you want and getting the money that you need so you can pay for it.
Advantages of Using a Realtor
In order to buy a new home, you need to find a house to buy. While there are a variety of ways that you can go about searching for a house, one of the best ways is to locate a realtor and let them assist you with the process. While there may be some additional fees associated with using a realtor, the benefits more than outweigh the drawbacks.
Not only will they be able to walk you through their entire catalog of homes (and often the homes that other realtors in the area have for sale as well), but realtors can often recommend mortgage lenders that they work with regularly (and who may offer reduced rates because of the reference) in addition to assisting you with getting utilities connected and recommending businesses and services if you're new to the area.
Finding a Mortgage Lender
Once you've found the house that you want to buy (either with a realtor or by yourself), you need to decide where you're going to get the money to pay for it. The best way for you to find a mortgage loan with good interest rates is for you to shop around and compare lenders before making your decision.
Request loan quotes from a variety of lenders, not just banks… after all, mortgage and finance companies exist to provide loans, as do online lenders.
Request loan quotes from a variety of lenders, not just banks… after all, mortgage and finance companies exist to provide loans, as do online lenders.
By taking the time to compare interest rates and loan terms from several different types of lenders, you might end up finding a much better deal on your mortgage than you would have from the lender whom you originally planned on using.
Down Payments, Closing Costs, and Other Fees
In most cases, you won't be borrowing a house's total cost with a mortgage loan… you'll be expected to pay a portion of the cost up front and borrow the rest. Unfortunately, the amount that you pay up front isn't all that you're going to have to pay once the deal is closed… other fees, such as closing costs, lender fees, and realtor fees, must also be paid.
In order to make sure that you have enough money to pay for all of this, you should inquire as to what fees will be associated with your mortgage loan and with purchasing the house you want before you request a quote from a lender. Subtract this amount from the money that you have available, and then use the amended total as your down payment when requesting loan quotes.
Ideally, you'll be able to submit a down payment of at least ten percent of the total cost of the home… this is the percentage that many lenders prefer, though most will accept a lower down payment or no down payment though closing costs and fees still apply.
John Mussi
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