Top 5 Commonly Asked Questions by First Time Mortgage Borrowers
As they are not familiar of how the market business works, it is always crucial for first time mortgage applicants to choose the right lenders for their long-been-wanted real estate property. Below are the top 5 commonly asked questions by first time borrowers which may help you before jumping into the application process.
Where can I find potential lenders?
There are many options. You can either go to a bank yourself and inquire for the necessary requirements or shop around the internet and get at least three to five mortgage estimates from reputable mortgage companies. You may also ask your friends, family, neighbors and co-workers who have recently bought homes. Ask them about their mortgage companies and if they had a good experience with them. Please, do not fail to compare. You’ll be shocked at the differences among interest rates and fees. Exert efforts and you’ll find better deals that will give you opportunities for fair interest rates, terms, and fees.
How can I tell if a lender is good or bad?
Do assess potential lenders by meeting them in person. A good lender asks lots of questions about your personal financial situation, never ask you to do anything that you feel uncomfortable with, return your calls and emails promptly and answers any and all questions you have. While good lenders are always committed to finding the most appropriate loan for you by not rushing you into a “one size fits all” type of loan, bad lenders on the other hand charge borrowers higher fees, give unfavorable terms, and structure loan contracts to make it difficult to keep up on the payments. They demand upfront fees without showing you the actual Terms and Conditions of the loan.
Should I hire a broker or not?
One important decision will be whether to pursue a house loan on your own or to use the services of a mortgage broker. While good brokers can shop your loan among several lenders, it’s important to understand that they are in the said job to earn for a living. Remember a broker is not obliged to find the best of the best deals for you. Some of them are known to work for mortgage companies that offer them big commissions. You might be at risk in paying more for hiring them. You are still personally liable to your money management, not them.
How can I have the best house loan deals?
Knowing what you want and what you need is the key in determining which type of house loan or mortgage deal will suit you best. It is important to be able to familiarize the advantages and disadvantages of each mortgage type. Outweighing benefits and risks associated with dealing such opportunity is crucial as it will determine the assurance of not getting yourself stuck in a pool of debts. First time buyers should know the difference between having a fixed rate, variable, interest only mortgages, and the like.
How can I protect myself from loan scams?
Know your rights as a consumer; this will lessen your tendency to be abused by dishonest mortgage dealers. Always validate and personally know your original creditor, solely relying on brokers and debt collectors during the entire loan period is a big no-no. Always validate and never fail to question if you have doubts. Keep records of payments you’ve already made. It’s always a good idea to have proof of payment with you. Such records will support any claims or complaints in the near future.