Dos and Don’ts of Shopping for Mortgage Rates
AnnieMac Education Center
Shopping for mortgage rates is one of the most important parts of the homebuying process. Finding a good mortgage rate can feel intimidating, but with help from your realtor and mortgage professionals, the right rate will be easier than ever to find.
A mortgage is a long-term loan used by homebuyers to purchase a home. Mortgage payments are paid monthly, and the cost is determined by the principal loan amount and interest rate.
Shopping for a mortgage has become a much easier process over the years thanks to digital technologies and online mortgage resources. Even though the process has gotten easier, there are still some dos and don’ts to understand while shopping for mortgage rates.
DO Get Pre-approved
Pre-approval is the best way to know how much house you can realistically afford. Get pre-approved for the loan and then search for the right home within your budget. If you shop for a house before getting pre-approved, you may be disappointed if the lender does not approve the mortgage for your desired home. Also, a pre-approval letter from a lender goes a long way when it comes to making an offer on a home or negotiating with the seller.
DO Check Your Credit Score
Before applying for a mortgage, it is always best to check your credit score and understand where you are financially. Get a credit report from one of the credit bureaus and make sure all information is accurate. You do not want to apply for a mortgage and be denied due to a mistake in your credit report
DO Hire a Professional
It is helpful to hire someone who knows how to handle each step of the mortgage process. An experienced loan originator will be able to give you the professional advice you need to make the best mortgage decision
DON’T Accept a Rate Right Away
Always check the current mortgage rates as the one that is offered to you may not be the best one out there. Shop around for the best rates and discuss your options with your loan originator. The loan you receive will affect what you pay each month and your desired down payment so you should pay attention to the rate you are offered very carefully.
DON’T Take the Easy Route
Just because something is convenient does not mean it is the best option. Do not just take a loan from your existing bank because it is the easiest option. Shop around before making the final decision and do what is best for your current financial situation.
Shopping for a mortgage can be confusing and overwhelming, but with the right team on your side, this process will be much less stressful.