Mortgage 101: A Lesson from the Corpus Christi Movers
The real estate industry can be a tricky place, so it is important to have some working knowledge of the real estate world prior to entering into purchasing a home or apartment. The Robstown movers thought it would be beneficial to our readers and customers to create an “intro to mortgage” type post so that you can learn some of the basics before jumping in headfirst with lenders. Some of the tips may seem more common sense than others, but they each have a specific impact and importance on your future finances. Read along and learn more from your friendly Texas movers.
Look at your finances. Compare the monthly payments on a 15 and 30 year mortgage with fixed-rate and adjustable options. Consider current financial responsibilities and future obligations, such as education payments or having a child. Be honest about what kind of payments you can afford, and don’t forget to include homeowner’s insurance and utility, cable, and water expenses. Overextending yourself with a home you cannot afford is an easy way to end up upside down on your home and open the potential for delinquency or foreclosure.
Obtain a copy of your credit report and ensure that it is correct. Errors on your credit report can be very detrimental to applying for a mortgage, and negative items will show as red flags to lenders who will question your likelihood to repay debts, such as the loan they give you for a home.
Test the waters with a few lenders. Don’t feel obligated to go to your personal bank and take out a mortgage. Shop around various banks and lenders and see who can offer you the best rate. Investigate the help of a mortgage broker, who has a group of lenders they work with to shop your potential loan around to for comparative purposes. See what leeway you can get with interest rates, broker fees, points, prepayment penalties, application fees, credit report fees, appraisal fees and more.
Gather necessary documents. When you apply for a mortgage, you’ll need several documents in tow. Documents that verify proof of employment, asset deeds (such as car titles) and liabilities like existing loans, credit card debt, and so on will all need to be with you at your application appointment. You want as much documentation as you can provide to prove your case and your reliability. Get preapproved—it will give you an estimated approval amount so you can begin property shopping with an accurate number in mind.
In the application process, be sure to get a rate lock—an essential part of today’s mortgage industry when rates are at historically low prices. This will protect your loan from rising mortgage rates and locks you into a specific interest rate and mortgage terms for a clearly stated period of time. The best way to approach this is by locking in as many elements of the mortgage as you can—from interest, to points, for as long as you can without being prohibitive.