Take Your Time When Finding A Mortgage: Do It Right
10/06/2010
You should spend just as much time finding the best mortgage loan for your home purchase as you spent finding that dream home you're about to buy. Does this sound unusual? Many first time home buyers would answer, "Yes.". After all, finding your dream home takes a lot of searching, a lot of walking around, and a lot of careful scrutiny, but getting a mortgage is easy, right? You just walk into a bank and sign some paperwork. Right?
In one sense, getting a mortgage is very easy. Borrowing money is one of the easiest things you can do, especially if you have a good credit score. But you may end up with a bad deal. In fact, if you rush into a mortgage, you'll almost definitely end up with a bad deal.
A mortgage is a unique financial instrument designed to meet the needs of a borrower at a given point in time. No two homes are the same, no two homebuyers are the same, and, as a result, no two mortgage packages are tailored the exact same way. You need to be closely involved with the process when you're getting a loan. If you accept a mass produced, mainstream mortgage package without checking your options, you're almost surely going to regret it in the long run. The rates will be higher, the loan term won't be what you need it to be, or the closing costs may be too expensive.
Compare your options. First, recognize that you have options. You really do. There are probably dozens of lenders in your area who are more than willing to work with you. Pick the one that offers the loan package that best meets your personal needs. Compare mortgage rates and loan term lengths, as well as fees and closing costs.
Don't start at the bank. At least, don't start with the largest one around. Large banks are designed to pump out as many standardized loan products as possible. You won't get a loan package tailored to meet your needs from a large financial institution.
Research. If you're trying to take out a mortgage but you don't understand how a mortgage works, you're going to get stuck with something you don't want. Guaranteed. Spend some time getting to know the loan process before you apply. This will help you better determine your own needs.
All of this takes time. Don't go with the first mortgage you find. There are probably better deals out there.
