Buying a new home is a big financial commitment. With so many lenders, different interest rates, and fee structures, it can be difficult to know which lender is offering the best price. Luckily, if you're prepared and organized it's easy to figure out which mortgage loan is right for you.
Before you settle on a mortgage, be sure to do the following:
- Check your credit report - Being familiar with your credit report before you begin filling out applications will eliminate any unpleasant surprises down the road. You can check your credit report for free once a year, and if you do notice items on your report that are inaccurate, you should contact the credit bureau and ask to remove them. Even the smallest error on your credit report could impact the interest rate lenders are able to offer.
- Shop around - You wouldn't immediately buy the first house you see, so don't settle on the first mortgage you find. Start by asking friends or family members about their mortgage lender or visit the bank or credit union where you already have an account. Do thorough research, read online reviews from other customers and meet the loan officer who will be handling your application. Bonus: the longer it takes for you to find the mortgage that's the best fit the longer you have to save for a down payment.
- Look beyond interest rates - While interest rates are an important factor in the cost of your mortgage, you should take the time to look at all the fees associated with each quote, including origination fees and points. If a lender offers a low interest rate but several additional fees are tacked on to the final price it may not be the most cost-effective choice.
- Plan ahead for all costs - Buying a home isn't just about securing a mortgage. You will also have to pay title insurance, taxes associated with the property, and homeowners insurance. These expenses can add up quickly, so ensure you have money set aside to cover these costs.
- Be transparent - A loan officer can only help you get the best mortgage if you are honest and upfront about your finances. If you have a complicated financial history with foreclosures or bankruptcy, or if you are self-employed, you'll want to be sure the loan officer has experience with those types of financial situations.
- Get organized - There's a lot of paperwork involved in the mortgage process, so staying organized is key. Know what types of documents lenders require, including paystubs, your most recent W-2s and bank statements, and keep them together so you're prepared when you need them.
If you have questions about the mortgage process or would like to talk about your unique financial situation, contact an expert Loan Originator at any of North Country Savings Bank's convenient locations.