5 Tips to Choosing the Right Mortgage

Tip 1: Get your finances in good shape

It’s never too soon to prepare to buy a home. The first step in improving your finances is to review your credit reports.  Your credit score will impact your mortgage rate, so you’ll want to know what your score is and how you can change it - especially if you find any issues or surprises on your report.

If you don’t already use a monthly budgeting tool, now is a great time to start! The best budgeting apps for 2022 will not only help you identify where your money is going, they can also help you figure out where you might want to cut back.

Tip 2: Assess your financial situation

How much can I put down? What monthly payment can I afford? Before you begin shopping around for a lender, it’s important to assess your current financial situation. Having a clear picture of where you stand will help you and your lender to explore your options and then narrow them down. A mortgage calculator can also help you estimate how much home you can afford.

You may also want to think about what area you’d like to live in and research local property taxes and the cost of homeowners insurance. Both of these items may impact your monthly home ownership costs. 

Tip 3: Research your lender options

There are many different types of mortgage lenders: credit unions, local banks, mortgage brokers, big banks, online lenders, etc. There are pros and cons to each of these options so you’ll want to do your research to find out which lender best suits your needs. For example, you may find an online mortgage company with a slightly lower rate but then decide they lack the personal touch you are looking for. 

Tip 4: Compare loan options

In addition to comparing lenders, you’ll also want to research and discuss your loan options: loan term (e.g., 30-year or 15-year), interest rate type (fixed or adjustable) and loan type (conventional, FHA, VA or other special term) may all factor into your decision. You’ll want to request a Loan Estimate before comparing offers to make sure you have all the fees and costs at your fingertips.

Tip 5: Get recommendations from friends and family members

Just like selecting your REALTOR®, recommendations from family and friends can go a long way in selecting a mortgage lender. Just make sure you understand the reasons why a particular selection was made before you choose and don’t forget that it’s always a good idea to still compare a few options. 

Ready to buy? Getting pre-approved with a lender is an important first step when preparing to shop for a new home. If you still have questions, contact your Cedar Haven Real Estate Group agent today!