When it comes to shopping for a mortgage, there are certain strategies to follow to get excellent deals on convenient Denver home loans. Yes, there is such thing as a bad deal on a mortgage! For this reason, it’s important to know what you’re getting so you don’t get overcharged or enter into an agreement that is not well-suited for your personal home-ownership situation.
7 Tips on Shopping for a Mortgage – How to Get the Best Possible Loan
1) Always shop around. Just because you receive an envelope in the mail that says in bold letters, “You’re Pre-Approved for a Mortgage at a Great Interest Rate” does NOT mean you’re being offered a great deal. If you’re in the market for a home loan, make sure to check and compare rates, terms, and fees for mortgages from local banks, national banks, credit unions, and mortgage bankers.
2) Use the Internet. If you’re looking in the newspaper for current mortgage rates, you may be seeing outdated numbers. Mortgage rates change daily, and by the time you get around to looking at the newspaper, rates may have already adjusted. The Internet is an excellent source for the most current information.
3) Don’t look at adjustable rate mortgages and fixed rate mortgages as being one and the same. Yes, they are both loans that you can use to purchase a home, but they do not offer the same terms, interest rates, or fees. Different types of loans are useful for different situations, so it’s best to talk with a mortgage expert to determine the type of mortgage that suits your circumstances.
4) Realize that the fees and costs associated with some mortgages are sometimes negotiable. This is not true in all scenarios, but it is accurate in some. Depending on the lender you choose, there may be some legroom for negotiating. The answer might be no, but it doesn’t cost anything to inquire.
5) Don’t panic if you get a copy of your credit report and discover a problem. Humans make mistakes. If you discover a problem on your credit report, you must get it fixed. If the mistake is innocent, if it is a one-time occurrence, or if it’s a mistake on the part of the credit reporting agency, you can explain the situation to a lender and still qualify for a good mortgage rate.
6) Lock in an interest rate while rates are down. Recently we’ve started to see interest rates rise but overall, rates are still historically low. Even so, there’s no guarantee that rates won’t gradually start to tick up significantly tomorrow, next week, or next month. If you are ready to purchase a home, it is important to get approved for an affordable Denver home loan soon. Lock in the best rate you can.
7) Don’t agree to a mortgage you can’t afford. You may have excellent credit and a great job that pays well. However, that does not necessarily mean you can afford a mortgage amount that is outside your comfort level. If you only want to spend a certain amount on your mortgage per month, don’t agree to a higher value loan even when a lender tells you that you can afford it.