Buying a house is probably the most important financial decision you will ever make. When you get a home mortgage quote before you start looking for a house, your decision becomes even more important. You have to find a balance between the house of your dreams and things like the down payment and interest rate you will have to pay.
Most likely, your first stop in this process will be the bank. This is the most obvious choice, but it isn't always the best one. Your banker won't tell you everything about a home mortgage quote. In other words, the best home mortgage quote for your banker might not be the best one for you.
Interest rates at the time
Take the interest rate issue. Rates change based on what the market needs. When you start talking about getting a quote for a home mortgage, the interest rate might be higher than when you actually get the loan. You need to keep track of these changes and get the bank to let you take advantage of the current rate. Your lender might not tell you this, but the difference could mean a few hundred dollars more in your pocket. Before deciding on a home mortgage quote, it's always a good idea to look at other sources of information and compare the rates on offer. If you have easy access to the Internet, you can even use websites to get quotes. This exercise will help you get ready to discuss the interest rate with your banker.
Mortgage tenure
The length of the loan is another important question you should ask. From the bank's point of view, a 30-year fixed rate is best because it can give the bank a return of up to 4-5 percent. But is it healthy for you? If you want to refinance in about seven years, a 30-year rate isn't the best choice because you'll only have the loan for seven years.
Hidden fees and levies
You might think that getting the right home mortgage quote would be easy once you and the bank have agreed on the price of the house and the interest rate. But you need to watch out for hidden fees or "add-ons" that your banker might not have told you about at the beginning. These include fees for loan processing, warranties, insurance, and other things. Before you sign the home mortgage quote, it's always a good idea to talk about these things.
Service fees that aren't fair
When you're looking for the right home mortgage quote, the lowest interest rate is the most important thing to look for. But this shouldn't be your only guide, because some banks will offer a low rate to get your business, but then charge you for services that don't exist. In real life, a graphic designer from Fairfield, Connecticut, found out that his bank charges much more than is normal for services like lender inspection and notary. Before committing to a quote, it is smart to compare the whole package of fees. It's important to remember that lenders will often waive a fee that your bank charges in order to get the deal done. So, it's important to see these chances and take full advantage of them.
In addition to these things, you should also think about things that have more to do with how you make decisions and for which no banker can give advice:
- If you decide to use a real estate agent to help you get a home mortgage quote, make sure you find the right one and know how much he or she gets paid.
- Buy a house at the right time of the year (there could be a particular time in the year when home prices drop, depending upon your location).
- Make sure you know why you want to buy a house.
- Carefully look over the house, find any problems, and figure them into the price.
- Choose the house's location carefully, keeping in mind how much it will be worth when you sell it.
- Make sure the house is the right size for you.
Getting a mortgage rate that works for you is one thing, but living with it is another. But if you understand how the market works in this area, you will be well on your way to being able to handle both of these things well.
