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Buying a home is the most significant financial decision
most people will ever make. Whether you’re a first-time homebuyer or a seasoned
homeowner, you’ll most likely need a mortgage to make it happen. Sure there are
some buyers who can afford to make an all-cash offer,
but if you’re not in that category you should plan to work with a lender when
purchasing your home.
In basic terms, a lender evaluates your financial background
and determines how much money they’re willing to let you borrow. You can then
use that money to purchase your home. Over time, you pay back your lender in
monthly installments.
While the concept is simple enough, the details of mortgages
can get complicated — especially for those new to the homebuying market.
While online tools and resources have simplified some
aspects of the process, you still need to do careful research before committing
to a lender or loan product. Ready to become a homebuyer and want to apply for
a mortgage online? Here are four tips for getting started.
1. Compare lenders
Even when mortgage shopping with traditional banks and
brick-and-mortar lenders, experts don’t recommend taking the first offer you
see. Not only do you want to find the most competitive rates and terms
available, you also want to be certain that you’re dealing with a qualified,
knowledgeable team. “Some homebuyers have been able to get a mortgage quickly
online,” says Compass real estate agent Demi Lee Antelo. "But others have
said that the estimates they got weren’t the most accurate.”
Better Mortgage is a digital lender that’s
transparent about its process. Not only can borrowers get pre-approved in
minutes, you can also pay no lender fees from application and origination to
underwriting.
2. Have a real conversation
Whether you’re going with a brick-and-mortar bank or a
digital lender, it’s crucial to work with a team that’s accessible and easy to
reach. Things can move quickly in real estate and your lender should be
available, be it over a phone call or a digital chat. If they can’t accommodate
your timeline, that’s a bright-red flag.
Along with its zero-lender-fee policy, Better also provides
one-on-one support with its home advisers. These qualified experts can get to
know your personal needs and explain every step of the process — from the time
you’re house hunting all the way to closing.
“Financing is not a one-size-fits-all [situation],” Antelo
says. “Call me old school, but a good person-to-person conversation is what
helps a lender truly uncover what would be the best fit for someone
financially.”
3. Get the details
When it comes to mortgages, the fine print matters. Small
details like property taxes, HOA fees and mortgage insurance can have a big
impact on costs over the life of your loan. Do as much research as possible and
enlist the help of an expert if necessary to truly understand your homebuying
budget. Be realistic about the short-term and long-term affordability of your
mortgage and consider how it will be impacted by the loans and interest rates
you qualify for. If you’re a first-time homebuyer with budget restrictions,
working with a transparent lender can be the key to maximizing your buying
power.
4. Find what’s right for you, and only you
Home financing is not a cookie-cutter process—finding the
right mortgage is just as important as finding the right house. Determining the
best loan for you will depend on your personal goals and priorities. For
example, a pair of newlyweds with a modest down payment savings will need a
different loan than a family of five expanding to their forever home. Don’t let
a lender push you into a loan that’s not a good fit.
About Better: Better is a family of companies. Better
Mortgage Corporation provides home loans (NMLS #330511); Better Real Estate,
LLC provides real estate services; Better Cover, LLC provides homeowners
insurance policies; and Better Settlement Services provides title insurance
services.
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