Buying a home for the first time can be a scary but exciting time. There can be a lot of documents and issues that come up along the way and without proper knowledge ahead of time it can seem overwhelming very quickly. Having a good real estate agent and mortgage broker through every step helps tremendously in explaining the details and helping you understand the right way to buy a home and obtain a mortgage.
Finding the right loan can seem daunting with as many programs, options and features available. How do you know which one is right for your situation? How do you know whether you have the best rate and costs? There are several ways to obtain a mortgage loan.
Mortgage Broker – A mortgage broker is someone who finds loans for a living. They have access to thousands of banks and programs and can set the applicant up with the best type of loan available. Mortgage brokers are typically more expensive than a bank because you are paying for the service of finding a good loan but the interest rates are lower because the mortgage broker can sift through many options and find the best one. The approval rating is usually higher too because that broker can access many banks offering loans to various credit levels.
The option is of course up the applicant but shopping around can lend you the best deal. Don’t worry about each bank or broker checking your credit just don’t buy anything else that could harm or lower your credit in the mean time. They all know you are looking for a loan and that won’t go against your record during this time. Make sure you receive a good faith estimate of all charges and fees involved and that you are not getting into a loan that can cost you down the line as in an APR that will suddenly spike, balloon payments due in a couple years, or pre-payment penalties. A good mortgage broker will look out for these for you and not enter into any predatory lending acts as some did a couple years ago. Finding a good broker you like and trust is crucial to finding the right loan for your situation. Make sure to talk to your real estate agent about some options and referrals.