Talking About Loans and Financing

Get The Support You Need: 4 Steps To Take When Working With A Mortgage Broker

If you're in the market for a new home, don't try to do everything on your own. The road to homeownership is lined with quite a few pitfalls, especially if you don't have the right team working on your behalf. To avoid problems along the way, you should always work with an experienced real estate agent. You should also work with a mortgage broker. Mortgage brokers work as an intermediary between you and the lenders, which means you won't be trying to negotiate a home loan on your own. When you sit down with your mortgage broker, here are four steps you'll need to take. These steps will help your loan process flow smoothly.

Discuss Loan Types

If you're looking for a home loan, the first thing you need to do is discuss loan types. There are a variety of loans available to people who are trying to buy a home. The most common loan types include conventional, FHA, and VA loans. Conventional loans come with the strictest qualifying requirements; however, they also provide some of the lowest interest rates. FHA loans are best for people who may have had credit problems in the past, or who won't otherwise qualify for conventional loans. VA loans are for people who are either active-duty military or who are veterans of the US military. Your mortgage broker can help you choose a loan that's best for you.

Know Your Points and Fees

If you've never bought a home before, you may not be familiar with the points and fees associated with the process. Points can be used to buy down the interest rate on your loan. For instance, every point you buy lowers your interest rate, which saves you money over the life of your loan. You'll also need to pay origination fees, which may also be called lenders fees. These fees are paid directly to the lender.

Identify the Additional Costs

In addition to points and origination fees, there may also be additional costs associated with the process. These fees will be paid to your mortgage broker and will be used for the services required for the purchase process. Some of the additional costs you can expect to have come out of your pocket include credit reports, appraisals, home and pest inspections, and other costs associated with escrow.

Lock in Your Rates

Once you find the right home, and you're ready to begin the process, be sure to lock in your interest rates. If you don't take the steps to lock in your rates, they may change before you sign the final papers for your home. Locking in the rates will help you avoid last-minute surprises that could price you out of your home.

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