Whether you are a First time buyer or re-financing your existing home, picking the right mortgage program to fit your needs can save you a ton of money. There is a wide array of mortgage options available and, it is a good option for the consumer to do their homework to educate them on the in’s an out’s of financing. Here is a short list of the basics, buyers and those interested in refinancing should look into:
Know your finances- Take a close look at your own finances before you make a big investment, so you will know what you are able to afford. When initially meet with a lender they will let you know what you pre-qualify for based on a combination of your credit score, income, and debt. Be well aware of what your own budget will allow. Also, take other factors into consideration the cost of insurance, difference in utilities, and insurance can add up.
Know your score- Of course, a lender will check your credit score but, did you know that you have the right to do so yourself? According to The Fair and Accurate Credit Transactions Act of 2003 (FACTA), Federal law gives you the right to view your own for free one time a year. Through FACTA you are able to obtain a copy of your credit report from each of the major credit bureaus- Equifax, Experian, and TransUnion- each year. Whether you are looking into a mortgage or not you should take advantage of this to monitor for any discrepancies on your credit report. To do so, go to www.annualcreditreport.com
Know the Loan Programs- Not every loan program fits everyone’s needs. You may choose to through a direct program through a local banker who will makes the final decision on the loan or through a mortgage broker who is able to shop around for different rates. When exploring lenders check for fees just a small difference in the percentage rate can save you thousands over the course of the loan and be sure to always get it in writing. There are several loan programs including:
Check out these videos on financing:
How to choose a mortgage - Choosing a mortgage
Smart Homeowners Learn Mortgage Basics with David Bach
For more videos check out our Youtube channel under Financing tips!