What To Look For In a Mortgage
By Paul Esajian on October 14, 2013
If you are financing the purchase of a house, picking a lender to work with will ultimately be one of the most important decisions you make. Initially, it would appear that your decision should be largely based on interest rates and fees, but not every buyer is the same. Most of the investment programs have gone away, but there are still some options available, with more coming every day. Interest rates are always important, but they may not be the most important thing if you are looking to keep the property for a short period of time. To figure out the best lender to work with, you need to know what to look for in a mortgage.
Are you not showing every dollar that you make? Are you looking to put down as little as possible? Are you a buy and hold investor that is looking to keep your monthly payment as low as possible? These are some of the questions that will impact which program is best for you. If you are not showing every dollar, qualifying for a conventional mortgage may not be possible. In that case, you could look for a stated program with a broker as opposed to a big lender. If you are looking at the least amount down, you could find this with your local bank. However, the interest rate and guidelines will be higher. For every item that you want, there is something you should be willing to give up in your mortgage agreement.
Unless you have an 800 credit score, the ability to put money down and are looking for a long term fixed rate, you are at the mercy of your lender. Most brokers and lenders have similar programs, but if you don’t find what you like with one company, you can certainly shop around. Like most things in life, you get what you pay for. If you are working with an inexperienced broker, you may pay less in fees, only to find out in 60 days that you do not qualify for the loan you want. This does not mean you can’t negotiate your fees and terms with an experienced broker, but sometimes it can be worth it to pay the point and go with someone that knows what they are doing.
If you know what you want and do some homework on whether or not it is possible, you should be able to shop around and get what you desire. You may have to make some concessions, as far as rate or fee, but you can get what is most important to you. Even if you have a broker that you have worked with in the past, it never hurts to call around and get another quote. New programs hit the market all the time and its possible one broker has an investment program that another does not.
Getting a mortgage in this market is difficult, but far from impossible. Before you start the process, write down what you are looking for out of your loan and what is the most important thing for you. You may find that if you call around and know what you want, you just may be able to get it.