The Mortgage Basics
Posted by Jackie Smith on October 2nd, 2009
Buying a piece of property is arguably one of the biggest life changing events a person experiences, along with marriage and a career change. Here are some of the things you should look out for when shopping for a mortgage.
Lenders
Once you have signed your mortgage contract, it will become part of your life for years. Therefore you want to make sure that you have a good interest rate and are working with a reputable lender prior to signing anything. You should put in a few hours, if not days, researching the various lenders, find out if they are a qualified lender or one that is deceitful.
This research can be conducted on the internet, by reading customer comments on the lenders site and those comments not posted on the site but in other places on the internet. If you are looking to do business with a neighborhood lender then the best way to research is by asking neighbors and friends, you are sure to find someone in the area that has done business with them. For out of area lenders you can also try to contact people who have, or are, familiar with the company, and find out what their experiences have been like. If what you are finding out matches the literature that you have on the lender then you can be sure you are working with a qualified lender.
Mortgage Quotes and Rates
Getting mortgage quotes is the next step in the process. Credit history, federal reserves nationwide interest rate, rates offered by banks; these are all the factors that are used to produce your quote. In order to get the lowest possible rates, it is wise to; obtain numerous quotes from various lenders.
Essentially, the APR is the amount of interest that will be charged on your loan. If you have a $100,000 loan and a 5% A.P.R. for 30 years, for example, that works out to a total interest charge of $5,000 a year multiplied by 30 years, which is $150,000 dollars. A change in percentage points makes a huge difference in the total amount of interest you will be paying, so shop around! The better your credit history, the more leverage you will have in negotiating a better deal. However, there are always special incentives being offered depending on specific geographical and demographic data. Investing a significant amount of time in rate-hunting will ultimately save you money, and help you buy the property you’ve always wanted.