Okay, so you’ve taken our advice and your credit is now rock solid. Now what? Well, now it’s time to put all that hard work to good use by locking in an amazingly low interest rate! Once your credit is stellar and you’ve pinpointed your exact mortgage budget, that means it’s mortgage shopping time.
The most important thing to remember is that you must exercise your options. The ball is in your court because lenders want responsible buyers just like you. Allow them to cater to you, and explore your rate options. Comparing mortgage rates from at least three vendors can save you at least $3,500 over the first five years of your loan. It’s crucial that you assess not only rates, but also fees associated with the terms of the mortgage. Doing so will allow you to be a better buyer by making the smartest decisions possible.
As you’re comparing quotes, ask whether any of the lenders would allow you to buy discount points, which means you’d prepay interest upfront to secure a lower interest rate on your loan. How long you plan to stay in the home and whether you have money on hand to purchase the points are two key factors in determining whether buying points makes sense for your specific situation. You can use this calculator to decide whether it makes sense to buy points.
The preapproval letter should be a necessity when it comes to the home buying process. When you clearly show lenders that you’re pre-qualified for a mortgage, this presents you as a serious buyer in the eyes of a lender. And when it comes to a competitive house market and a heavily sought-after home, you’ll have an edge on your competition with one foot automatically in the door. Don’t skip the pre-approval letter; it could be the difference in you landing that perfect first home!
Additionally, there are some real estate agents who will require one just to give you a tour of the home. It’s a small step to take that speaks volumes to sellers, agents, and especially lenders. Village Properties’ agents work directly with a number of local loan brokers, and anyone of us would be delighted to give you a referral.