Whether you’re buying your first house or your fifth, the most important thing about buying a home is getting an affordable mortgage with competitive terms and a low interest rate. Hunting for a mortgage loan might seem daunting, however, with the stiff competition in the mortgage market, you can get yourself a great mortgage even if your credit is marginal. Here are five actionable tips if you are seeking a mortgage loan to buy a home.
First, consult your normal bank or financial institution
There are two ways you can go about getting financing for your new home. Traditionally, a banking institution has always been the go-to place for this type of loan. The other way is to use the services of a mortgage broker borrowers have often relied on in certain circumstances.
Your regular bank is one of the best places to start your search for a home mortgage loan. If you’ve been banking with them for awhile, and perhaps have or have had other loans with them, they may be willing to offer you a lower and more affordable mortgage rate just to keep your business.
On the other hand, mortgage lender have extensive resources to locate the best deals; they have a broader ability to search out options for you to obtain the loan even if your credit is less than perfect. They can utilize many different financing companies to give the buyer better choices. Either method can yield you some of the best deals around.
Visit the competitors of your local bank
The next step is to go to your bank or lending institution’s chief competitors if you are using your bank to obtain a mortgage. Sometimes competition can reward you with the best terms mortgage.
If the competing lenders offer you a lower rate, for instance, go back to your regular lender or bank and show them the offers you’ve received – it can be a real pain to move all your banking to a new bank and your current bank doesn’t want to lose your business, no matter how “big or small” it is. By showing your lender the offers you’ve received from their competition, they may be able to rework their offer to you and offer you a more affordable mortgage.
Provide as much information to mortgage lenders as possible
When you’re shopping around for the right mortgage, you’re really shopping for a lender. It’s important that you find a lender you can trust – you’ll be dealing with them for the next one to 25 years, or even longer, depending on your mortgage.
To achieve this, however, it’s important that you provide identical information, and as much information as possible, to the lenders that you’re requesting a mortgage quote from. This will ensure that you have the best “apples to apples” comparison to make with your mortgage quotes. Perhaps the best place to start your search for a reputable dealer is on the internet. The internet has many searchable mortgage databases for you to use to compare mortgage rates.
Research the less common lenders
After you’ve determined the lowest available mortgage rate available to you by standard banks, brokers and lenders in your area, it’s time to research the less common lenders. Small lenders in your area will likely post newspaper or billboard ads offering impressively low mortgage rates – it’s important to remember that these advertised rates are for “star clientele” who have great credit ratings. If your credit rating is marred, you will likely not qualify for their advertised rate, however, you should still research what rate they’ll have available to you.
Compare home loans wisely
Once you’ve researched the Internet and local lenders and businesses for affordable mortgages, you should have anywhere from at least 5 to 30 quotes to compare. It’s important to remember that other options on your mortgage can impact your rate – whether you’re going for an open or fixed rate, and the term of your mortgage. Compare wisely and remember to watch out for the seemingly minor differences that can impact the rate you’ll get.