It makes sense to be pre-approved (by a mortgage
lender) prior to buying a home. Take the worry and anxiety out of purchasing a home.
Find out ahead of time the size and type of mortgage you may obtain. Many lenders offer
this service free of charge. There are numerous benefits to obtaining a
written mortgage commitment before you look for a home, here are just a few: - Its a great negotiating tool to the seller, you become as good as a "cash buyer".
- Allows you to focus on the finest properties within your price range. You won't waste time on homes you can't afford, or that are out of your budget.
- Speeds up the approval process. Typically all that's required is an appraisal on your new home, all else has been completed.
- The best way to interview various lenders and acquaint yourself with market rate trends and new programs.
Often people gravitate to what they perceive as the
lowest rate or "the best deal" from an advertisement. Pricing is important, but
should not be your primary concern. Do business with individuals who earn your
confidence and trust. There are incompetent sales people in all fields of business.
When it comes to selecting the right mortgage, make sure you have been given all the
options available to you. I have literally saved my clients thousands of dollars
by guiding them to the right mortgage program!!! For example, right now the State of NY
offers three (3) unique programs to assist "first time buyers". Two of these
programs are available without a downpayment and may be superior to other options such as
"FHA" or "regular" conventional loans.Below are a few salient points to remember when shopping a mortgage:
- Ask for a "Good Faith Estimate"of closing costs and fees. This should also include a personal attorney fee and home inspection cost if applicable. Compare these costs along with the rate and points. Its a good way to expose "hidden charges", and negotiate fees with the lender.
- Find out if the lender offers "local" processing and underwriting. This is an added value since it allows the local office more control to handle any problems or time delays during the transaction.
- Inquire about "lock in" procedures. This is critical as interest rates change daily.
- When refinancing, find out if you can use an existing survey (saving the cost of a new one), and if you can obtain a "reissue rate"for title insurance (a 30-50% discount off the regular premium!!!)
- Have the lender explain your "top three" financing options in detail, then choose the one that's best for you.
