Time to Shop for a Good Lender?

Q. We are shopping around for mortgage, but we don’t even know where to begin. What are the biggest mistakes people make?

A. First, before you begin, do your homework. Choosing the wrong mortgage is the biggest mistake people can make. Shop around. Make sure to look at the initial interest rate, future interest rates, and payments. Also, make sure you know if there are any prepayment penalties, and if so, what these are before signing anything.

Secondly, pay off your credit cards. Excessive credit can affect your ability to qualify for a mortgage. A lender doesn’t want you to get in over your head, and then have you unable to make your payments. Another big mistake is not having the home inspection done. Make the purchase of your new house contingent on passing a home inspection. Don’t skip this step. That way you’ll know whether there are any serious problems with the house (mold, leaking roof, poor foundation, cracks) before you buy. It’ll be money well spent!

Also, know the terms. Know the difference between pre-qualified and pre-approved when talking with lenders and real estate agents. Pre-qualified means the lender is making an estimate about how much you can borrow based on the financial information you’ve provided. Pre-approved means the lender has verified the financial information you’ve supplied, and can offer you a loan at a specific amount, interest rate, and under certain conditions.

Lastly, hire a competent real estate agent who is experienced, who specializes in your area, and has a record of success. Ask the agent for specific information about how he/she plans to market your house.

If you are in the market for a home and need competent and caring representation, please call me at 206-226-0565.