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5 Things You Must Know Before You Buy

 Whether you are about to buy your first home, or are planning to make a move to your next home, it is critical that you inform yourself about the factors involved in making good finance decisions.

Industry research has shown that there are 5 common mistakes that most home buyers make in mortgage shopping that can cost or save them substantial amouts of money during the life of the loan...

  1.  You can, and should get pre-approved for a mortgage
       before you go looking for a home.

Pre-approval is easy, and can give you peace-of-mind when shopping for your home.  Your mortgage lender can provide you with a written pre-approval at no cost, and most of the work can be done quite easily right over the phone.  Meaning much more than a verbal approval, a written pre-approval gives you credibility when dealing with a seller who may be suspicious of buyer qualifications. 

 

  2. Know what monthly payment you feel comfortable with.

When you discuss mortgage pre-approval with your mortgage lender, find out what amount you qualify for, but also consider what monthly payment you feel comfortable paying each month.  By considering both of these numbers, you will be able to assess what price you should be searching in, and avoid looking at homes that are out of your price range.

 

  3.  Think about the future to determine the best direction
       to take now.

There are many questions you should ask yourself before you commit to a certain loan program.  How long do you intend living at the home you are purchasing?  In what direction are interest rates headed, and how fast?  Is your income expected to go up or down in the near future?  The answers to these questions will assist you in determining the best program for your needs.

 

  4.  Make sure you understand pre-payment priviledges or
       penalties.

Many loans allow you the ability to pay off all or part of the principal at any time without tacking on a penalty fee.  Make sure you ask your lender if there is a pre-payment penalty(which is common), and if so, how long do you have to pay on the mortgage to avoid the penalty.  Many loans have a 1 or 2 year term, after which you may pay off the loan without penalty.

 

  5.  Make sure you're dealing with a mortgage expert.

Make sure you're dealing with a mortgage expert during the largest purchase of you life.  Ask your lender how long they've been working in the finance industry.  Make sure they're involved fulltime and work solely on mortgage loans.  There are some Realtor/Mortgage Broker types who claim they can assist you with everything.  Be Vary Cautious - Remember, "Jack of all trades... Master of none".  Utilize the services of a Realtor to list or buy.  Utilize a mortgage lender for the financing.

 

Need to speak with a mortgage professional in your area?

Need to speak with a Realtor in your area?