TIPS FOR THE BEST DEALSNow that you know more about mortgages and where they come from, I'll share with you my tips for getting the best deal and saving yourself a lot of headaches in the process.
Prequalify before you shop for a home: Smart buyers make sure to know how much they can afford to borrow before beginning to look at homes. You can bet that the seller's agent will ask if you have been pre-quailified; if you haven't, they may decide you are not a serious buyer. Having a deal in your pocket is always good amunition in negotiations. (However, I generally have my buyers "preapprove"before they start looking at homes. This is a much more savvy way - you have it in writing, providing you even more leverage when making offers and during negotiations).
Lock in rate (or not): In the time it takes you to find a home and close your mortgage, the interest rate on your loan could fluctuate upward. If it looks like rates are heading up, lock it in. If rates appear to be falling, let it float. If your lender agrees to lock, make sure you get it in writing. (Get the advice of your Realtor or your mortgage broker. Their knowledge and experience can really help you in this decision).
Apply for an FHA or Veterans Administration-Backed Mortgage: The Federal Housing Administration and the Veterans Administration don't actually make loans, but they do guarantee loans offered through tradiitonal lenders. With an FHA loan, you can put down as little as 3% depending on the value of the property. VA loans often require no down at all, but they carry eligibility requirements based on service in the armed forces.
Negotiate the points:If you are considering a large mortgage your lender may be willing to lower the points charged to get your business. You lose nothing by negotiating. If you are planning to stay in your home for less than five years, lower your points paid by accepting a higher interest rate. You pay higher costs up front but can save money in the long run. Just remember there are three componenets to your mortgage loan: the interest rate, the points and the lender's charges.
More to come.....
Bryan VogtStrano & Associates, Realtors® - GMAC Real Estate
(618) 355-5824
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# posted by
Bryan Vogt @ 11:32 AM
