Monday, June 22, 2015 / by Bill Berning*
Signing off on a mortgage should be an exciting and positive experience. After all, this document is essentially the key that unlocks your new home. However, failing to work out the best rate possible could put a damper on this otherwise memorable event. With this in mind, let’s listen in as some of the most renowned financial and realty experts offer up advice on how to maximize the value of your mortgage agreement.
Should I explore other options? What if I come back with a bigger down payment later? These and many other concerns can radically impact the size and scope of a home loan, so it’s well worth your time to brush up how to best navigate this process before sitting down with your bank’s lending officer.
If you’re in the market for a mortgage, setting up a smart game plan isn’t just a sensible idea, it’s virtually required. Otherwise, you run the risk of getting locked into an agreement that’s detrimental to your future fiscal options. Thankfully, with a few quick tips and tactics guiding the way, finding yourself in this trap doesn’t have to be a part of your future home buying prospects.
Get Your Ducks in a Row Ahead of Time
Before doing anything else, the financial experts over at Fox News Business point out that it is beyond imperative to get all of your documentation and facts in order before showing up at the front doors of your lending agency. Not only does embodying this mindset put you in a position to boost the final loan number, it also shows the person on the other side of the table that you’re a serious and determined candidate.
If you’re unsure what to gather and bring for this meeting, it’s never a bad call to err on the side of going above and beyond the bare minimum. Bank statements, credit reports, preapproval forms, and anything else that you think you might need during the online or in-person application process is fair game. It might seem like overkill now, but once you realize just how important preparation is for this life changing step toward owning a home, you’ll thank yourself later.
The Bigger Down Payment, the Better
Outside of figuring out the details before you get the wheels on this process rolling, the team over at Fox News goes on to suggest coming in with as big a down payment as possible. Yes, going this route can put a strain on your finances now, but securing a lower interest rate and monthly payment for the next several decades as the mortgage matures definitely makes this tradeoff more palatable. While you never want to go without in terms of essential purchases and daily necessities, finding creative ways to enhance your down payment is one of the smarter strategies that prospective homeowners simply overlook.
Don’t Be Afraid to Shop Around
In terms of finding the right lending partner, the Board of Governors of the Federal Reserve System list shopping around as one of the best possible tactics you can employ on this front. The reason behind this suggestion stems from the fact that these organizations aren’t required to go out of their way to ensure you have the best arrangement possible in terms of loan amount and interest rates.
While the more optimistic buyers out there assume that these lenders have your best interests at heart, the reality of the situation is that there is no binding legal or moral obligation forcing these businesses to go above and beyond during this process. In other words, it’s important to start looking out for yourself as you begin reaching out to these organizations. With this myth firmly dispelled, you can enter the market under the appropriate pretenses and with a willingness to leave no stone unturned in terms of potential lenders.
You Don’t Have to Find a Mortgage on Your Own
Speaking of exploring the various options before you, the experts from the Federal Reserve go on to suggest that bringing your own financial and real estate professionals into the fold can help limit your exposure to negotiating missteps and other avoidable risks.
Even if these experts don’t actually sit down at the table with you to hash out the details, simply having a second opinion on mortgage amounts, your financial capabilities, and what works for you and your family can go a long way. At the very least, this helping hand can ease your concerns and provide you with a little peace of mind as you negotiate the finer points of an impending mortgage agreement.
Understand What’s Happening on the Other Side of the Table
For the final tip on this list, Bank of America’s mortgage specialists note that few strategies are as powerful – and eye-opening – as spending some time learning exactly what’s going on with the professionals on the other side of the table. Essentially, the more you know about the approval and loan process, the more likely you are to build a request or application that hits on all the key points for acceptance.
Naturally, the particulars of the process can vary drastically from lending partner to lending partner, but as you learn more about how these select institutions calculate loan fees and qualifiers, the better off you’ll be when it comes time to fit your financial situation to their requirements. Even going so far as to keep up with trends and shifts in daily interest rates offered puts you in a prime position to fire off your application when the timing is just right for the best deal possible.
There’s no denying that navigating the waters of the mortgage process can be a daunting task. However, with the right preparations and mentality guiding the way, such as a willingness to get your affairs in order as soon as possible and shop around for different offers, you’ll be in a position to get the loan you need and take the next big step forward on your journey toward a dream home of your own.