(TACT)You're ready to become a homeowner, and you want to ensure you're making smart financial decisions every step of the way.
No matter where you are in the home-buying process, it's smart to start thinking about how you'll evaluate potential mortgage lenders.
But especially as a first-time home buyer, you likely have lots of questions about how to choose the best mortgage companies.
This post will fill you in on what you need to know before you commit to a specific lender.
Afterward, you'll be ready to find your dream home.
1. Know What You Need
In order to find mortgage lenders that are a good fit for you, you need to be clear about what you need.
Usually, the down payment on a new home is about 20% of the home's total cost. You will also need to be able to pay your property taxes, any closing costs, and of course, your homeowner's insurance bill.
Know how much you'll need to cover these costs and still have a "safety net" left over.
The more organized you are, the easier it will be to find the best mortgage provider -- and start saving.
2. Understand the Interest Rates
The best mortgage broker is one that is transparent when it comes to the interest rates associated with loans.
You want to ensure you can afford the interest rates, but understand that they fluctuate every day. Your broker should be able to give you several different loan options to choose from, and you can choose which one is the best fit for you.
This is also the time to be honest about your credit history.
If you don't have perfect credit, you may still be approved for a mortgage. However, you may qualify for a lower loan amount or a higher interest rate. Usually, you will need a credit score of 580 to qualify for a loan.
3. Study the Application Process
Make sure you fully understand the application process when it comes to the loan.
Ask how long it will take to secure a mortgage rate, about any lender fees, and what your approval requirements are (these are things like your debt-to-income ratio and the size of your down payment.)
You should also ask about any documentation you'll need to provide.
Asking questions about the application process is a smart way for you to better evaluate the experience level of the lender. It also gives you an excellent look into the kind of customer service you can expect to receive as a customer.
Use This Guide to Find the Top Mortgage Lenders
The right mortgage lenders can turn your dream of owning a home into a reality.
Still, you need to ensure that you've done the proper research, compared rates and that you understand the application process before you commit to a lender.
Looking for more tips regarding home ownership? Need to improve your credit score and find ways to save money for that down payment? Want to renovate your home the right way?
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