First Steps of Mortgage Shopping

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Selecting the best mortgage requires calm diligence.  There are few times in life when shopping wisely matters so much.  Careful examination of the borrowing schemes can save tens of thousands of dollars and, in some cases, keep the roof over your head.

What is My Situation?

An honest examination of your current situation and future prospects sets the stage for success.  What size of monthly payment is consistently affordable?  Leave room to maneuver around economic downturns.  For consumers, the biggest lesson of the subprime mortgage crisis is not to buy beyond our means, expecting rising house prices and job promotions to fill the gap.

What size of downpayment is possible?  The bigger the downpayment, the better the mortgage terms offered.

Where Do I Find a Lender?

Before house-hunting comes loan-hunting.  Pre-approval for a mortgage impresses sellers and shortens closing time.  Real estate agents are better able to help when they know the financing parameters.

Banks, credit unions and mortgage companies are first-line choices.  A seller may finance they buy, as may family members.  Mortgage brokers, whose job it is to connect borrowers with lenders, are involved in more than 50% of U.S. real estate loans.  Brokers have connections with hundreds of lenders and are able to navigate the many options.

Lenders take into account credit history, employment status and the type of property sought to determine the loan limit.  It’s useful to go armed with your credit rating from the major services, such as Equifax, Experian and TransUnion.  The mortgage application is finalized when a choice of property is made.

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