For other individuals, it may be somewhat stressful, to say the least. However, it doesn’t always have to be that way. One of the more challenging aspects of purchasing a home is first finding the right loan. Homebuyers have a plethora of options in today’s market, which has both positives and negatives. Therefore, here’s a list of the things you need to know to get the best home loan possible.
You Need to Shop Around
While there is a variety of establishments ready to provide you with a home loan, you should always shop around before accepting the first offer. At the minimum, a homebuyer should apply to about three to four lenders to compare their rates and services. Now, don’t get scared off when people begin to tell you that this might hurt your credit score. As SFGate reports, the FICO formula actually encourages people to rate shop if their inquiries fall within 45 days of each other.
What to Bring to the Table
When it’s finally time to sit down with a lender, you should make sure to bring a couple of very important documents. Depending on your position, you might need to bring proof that you’re an educator, any documents that you receive veteran benefits, a copy of your FICO score and a list of other lenders to compare your rate. Other factors, such as the location of the property, may also be of use to lower your rate. Visible Equity says that certain qualitative and environmental factors will allow you to qualify for more money or a lower interest rate even under the new CECL model.
Go With the APR, Not the Rate
One of the most common mistakes made by new homebuyers is solely looking at the home’s rate. Although this is useful, it is not the only number you should be paying attention to. Credit.com explains that oftentimes, lenders know you won’t pay attention to any other number but your rates and, therefore, will price gouge you by charging higher upfront fees. Lenders will often try to justify this price by saying that they are simply adding discount points or money that goes towards the interest of the loan. The fact is that lenders have a variety of other ways to accomplish this without charging you an arm and a leg.
Buying something as large as a home can be an intimidating prospect, but as long as you go into the transaction prepared, it won’t be so stressful. Just make sure that you take the time to find the loan that will best fit your situation and do not get duped by less-than-honest lenders.
Ready to buy your first home, but not sure where to start? Steelbridge Realty has many experienced agents to help you and beautiful properties to show you! Contact us today!
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Steelbridge Realty LLC is a Licensed Real Estate Brokerage that utilizes cutting-edge marketing techniques and data-driven Real Estate solutions in today’s ever-changing environment. Our group of professionals have decades of experience and have navigated through many business cycles. Our diverse background gives us the tools to guide people towards successful decisions.