Mortgage Basics – Things You May Not Know
Demystifying the Mortgage Process for my Hudson Valley home buyers
Mortgage Shopping 101 – When it comes to getting a mortgage learning as much as you can early in the process can save you money. Buying a home for most of the people I meet, is the single largest purchase of a lifetime. Few homes in my area sell for less than $150,000 and most sell well over that number. A commitment to the bank for a mortgage is something that needs to be taken seriously. Understanding all the details can be overwhelming. Online information is not always clear and it is difficult to navigate all through all the outdated and misinformation that floods cyberspace. As your local real estate agent, my job is to facilitate the process and help guide you along the way.
Many of my clients do research well before I meet them, while others just jump right into the process. When interviewing new buyers and explaining the process many wish that they had started with a bank much earlier. The things that they “assumed” about getting a mortgage were sometimes misguided. When this happens it can delay an expected time frame, while others didn’t realize that they could have purchased a home a year earlier.
Tips for home buyers to get started with the process!
1. Banks don’t always give the best deals to current clients. Having a checking account at a local bank doesn’t do much for you when applying for a mortgage. While they will be happy to do business with they may not be your best option. Loyalty in the past may have helped your mortgage application, but today it no longer matters.
2. A pre-qualification letter doesn’t mean you are obligated to that loan officer or bank. A recent client was unhappy with her loan officer and complained that she was never available to her. I let her know that since she had not yet started the application process that she still had time to shop for the right fit. Unaware that she still had choices, my client pursued another bank.
3. The amount stipulated in the pre qualification letter is the amount you should spend on a home. NO this not the answer. Your budget is not the same thing. A bank gives you a number that they will allow you can qualify for. It does not take into consideration the rest of your budget for things like movies, ballet lessons, vacations and expensive wine. Work with your lender to understand your monthly payment rather than just a pre-qual amount.
4. The lowest interest rate is not always the best deal. Ask about all the fees involved. You should get a printed Good Faith Estimate of all fees and interest rates for the loan. A super low interest rate may be offset with large fees up front. The differences between one bank and the next don’t usually vary that much. It a deal seems too good to be true, it probably is.
5. When you ask a real estate agent for a referral they get a kick back. NO absolutely not! It is unethical and illegal. The only reward that an agent gets for referring to a lender is good service. I only give out names of lenders that work well with my clients. When my clients are happy then I am happy. A proven track record for good service and getting to the closing table with buyers is what it takes to be on my short list of preferred lenders. I expect nothing more, and certainly nothing less!
6. Loan officers don’t work weekends. YES they do!! During weekends many buyers shop for homes and need answers. Waiting until Monday to place an offer could result in your losing a potential home. Many mortgage professionals answer calls every day of the week. Pick one that is available on their cell to answer calls on weekends.
More Questions? I’m here to help!
What does this all mean to the average buyer? Find a bank early on and start the process of getting pre-qualified. Always seek out more than one lender when you begin the process. Gather as much information as possible and ask tons of questions. A loan officer that works with you directly, providing fabulous service, and information to educate you every step of the process is worth their weight in gold.
If you are considering purchasing a home in the next 12 months take the time to sit down with a real estate agent and a lender now. Planning for the future starts with the first step. I would be happy to set up an appointment with you to explain how the process works and what we can do for you now to get ready for your next steps to becoming homeowners in the Hudson Valley.
Mortgage Basics – Things You May Not Know
Resources of Mortgage Information:
- U.S Department of Housing and Urban Development
- Homeownership Education in New York State
- Tips from the 25 Most Influential Mortgage and Real Estate Pros on G+
If you would like to receive more information like this please subscribe to my blog. No Spam No hassles, just info on local housing. Looking to buy a new home? Search the MLS for New Homes in the Hudson Valley. Feel free to contact me anytime at (845)-527-7115 or come visit me on Google+