7 Must Do's When Shopping For A Mortgage Loan

1. Review your credit report. A typical error for borrowers is not having a copy of their credit report on hand. By knowing what is on your report and your credit score, you will know firsthand f there any blemishes or errors that need to be corrected.

2. Get pre-approved. The initial move a serious borrower needs is to become pre-approved for a mortgage to buy a home. If you do not have this yet, you have no idea of how much you will qualify for in a home loan and what programs are available. You only have a vague idea which will not get you far.

3. Shop for the best rate and terms. It’s true there are many companies that offer mortgage loans. However, it could be a costly error to apply with one based on it being convenient or one that was suggested by a relative or friend without perusing home loan rates and terms offered elsewhere.

4. A Mortgage is not the best solely because of interest rate. Companies that offer you the absolutely lowest rate is not the golden rule to go ahead with them just because you think it is the best mortgage loan based on that alone. For instance, a borrower can get a low rate on an adjustable rate mortgage that becomes a drastically higher later down the road. Or, you may find that the mortgage lender is requiring lots of unusual fees. Whether there are discount points to pay. You need to compare the full scenario and that’s where a mortgage planner comes in who helps you much like a financial planner and looks at all possibilities if you take Loan A over Loan B.

5. Be familiar with loan terminology. Borrowers need to understand what closing fees are, differences between a fixed rate and adjustable rate loan, and other typical mortgage terms before shopping for a mortgage loan. Many web sites that focus on real estate or mortgage loans will help you with the terminology. Just look for the glossary, go through their calculators so you do not feel surprised at closing.

6. Budgeting your credit cards. Before shopping for a home loan, you want to be doubly sure that balances on your credit card are paid on time or better yet, paid in full. In addition, you should not be opening and closing credit card accounts. Have all of this work out before and possess three or four revolving line credit cards at the most.

7. Understand your monthly expenses. When a person gets a mortgage it will mean they pay a monthly amount above their current monthly expenses. You need to figure out how much you can comfortably pay without going into monies that are required for other daily living expenses. Plus, you should add in property taxes which is a new expense for first time buyers.

8. Bonus. Interview a few different loan officers to get a feel for what si out there. Try and go with one who is licensed versus an assistant. Make sure the person you deal with has their name on the application. That way you will know it is not an assistant or apprentice to help you on a large transaction.

By: Mario72

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Mario Olivera is an avid investor in real estate and contributor to FHA Jumbo Mortgages and a Local Mortgage Lender website in your area.