For the Biggest Purchase of Your Life, Use Those Carefully Honed Shopping Skills
When shopping for a home loan, many people don’t know where to start. You may be feeling slightly overwhelmed and tempted to just go with the first thing you find. But, this is not always the best strategy. We’ve all been shopping before and have become aware of the countless options available, when it comes to any product.
Much like items or products you can find at the store, home loan and home refinancing costs are also negotiable and interchangeable. Due to the fact that there are numerous options on the market, it is important to weigh these factors and put on your shopping cap. The most influential aspects of any home purchase or refinance are the financial terms and what they include.
Mortgage interest rates impact the amount of money you would pay throughout the life of the loan. Many factors go into what determines a mortgage rate. Not only do the economic conditions influence rates, but different lenders also offer different rates. These differences have the potential to generate significant costs or savings for you over the life of the loan.
Aside from mortgage interest rates, it is also important to understand the meaning of mortgage maturity. This is the length of time you choose to pay back your loan. Many people choose a 30-year fixed-rate, but there are plenty of other options such as 15-year, 20-year, or 40-year loans. When mortgage shopping, be sure to compare these options -- you may not realize what the 5 or 15 year difference in your finances could do for you in the long run. Having a loan for a longer period of time (generally) means you will be paying more.
Of course you can’t figure all of this out on your own; that is why we strongly recommend working with not just one, but multiple mortgage lenders. Shop around and see which one offers you the mortgage option that best fits your personal needs and financial situation. There are many types of loans out on the market and different lenders offer different types in order to find what best fits your needs. The options vary from fixed rate mortgages that apply to a single interest rate to the amount of the loan, to adjustable rate mortgage, which allows the interest rate to periodically change.
While you are comparing lenders, be sure to touch on rates, fees, terms, maturity, down payments, and any personal questions you might have. Lenders understand that a home purchase or refinance is a significant milestone in your life and it’s important for you to take your time when looking for one. When you find the right lending officer who understands your needs, it’s easy to keep calm and mortgage shop on.