Choosing the Right Mortgage in Orlando
Purchasing a home is a long-term commitment. Mortgages range from 15 to 30 years meaning if you don’t want to be stuck in a bad mortgage for a long time, you need to shop around. Fortunately, we have a few tips to help you in choosing the right mortgage in Orlando.
Finding a Lender
Locating a good mortgage lender relies on a factor of variables and not just a good interest rate. Working with quality and top-rated mortgage companies ensures you have a dedicated and knowledgeable staff working on your behalf and guide you as best as possible. Read through some of the tips below on how to get the best mortgage lenders.
- Compare rates from multiple mortgage lenders:
There isn’t a one fit all mortgage lenders. Some are neighborhood banks, big national banks, credit unions and for others, an online mortgage lender may be the best choice. Your options are vast. As a good start, we recommend beginning online.
You can search for the best mortgage rates online and use it as a base to compare. A good thing to keep in mind though is that the price you see online is typically the starting point. It will most likely change as you work with the lender and your credit, and previous scores and reports are pulled. After obtaining this information the lender can now give you an accurate quote which you can choose to lock in.
Make sure to go to several different lenders and obtain the best quotes you can before making your decision. Compare costs and what works best for your financial situation and use your new research for your advantage in negotiations with your lenders.
The lowest rate available isn’t the only reason for choosing a lender, but it is important. The interest you pay over the span of the loan and other factors can play a part in your total costs. Check out your monthly mortgage payment by using a mortgage calculator.
- Raise your credit
To buy a home you need to make sure that you reach all income and credit requirements. This is to assure the mortgage company that you will be able to repay what you say you can. Having a low credit score tells your lender that you would be a risk to lend money too, resulting in higher interest rates on the loan or denial. If you have a higher credit score which indicates you make on-time payments and can be trusted, it gives you the upper hand to negotiate better terms.
Generally, if you have a credit score under 580 you will have a tough time qualifying for many types of mortgages.
To build your credit score, you want to first make sure there are no pre-existing errors and that your credit reports are accurate. You can obtain your reports from the three major credit bureaus: Equifax, Experian, and TransUnion. Each allows you to receive a free report every 12 months. Paying off any high-interest debts and lowering your overall debt quickly is also a great way to build your credit. By paying off your debts and previous loans before purchasing a home, it also allows you to have more money for the down deposit.
- Get Pre-Approved
Getting a good mortgage is only half the battle. The other half is finding a home to match your needs, especially in the buyers’ market, it is today. Getting a mortgage pre-approval letter before looking at homes can help you stand out from the crowds of other buyers looking at the same home. By getting preapproved it signals to the sellers that you have already have your finances looked at by a lender and has figured out how much you can afford to borrow and the homes you can buy.
Most buyers go through this process of being preapproved so if you find yourself in a situation where you have not, there is a good chance you are at a disadvantage compared to the competition.
To get preapproved you must provide your lender with a substantial amount of financial information. It helps though to show you can make an offer on their home which will likely be approved, and it can ease the process of getting a mortgage since the lender already has your financial information.
A list of things you would need when getting preapproved is:
- Social Security numbers for all borrowers
- Your bank, savings, checkings, and investment account information
- Any outstanding debt which includes your credit card, car loan, student loan and other balances.
- Two years of tax returns, w-2s and 1099s
- Salary and employer information
- And information of how much of a down payment you can make and where the money is coming from
It is still a good idea to talk with multiple lenders when getting preapproved as they all may offer different levels of benefits. Getting pre-approved will help ease the mortgage process when ready to choose your new mortgage for your home.
- Understand the different lenders
In the mortgage lending world, there are a lot of different players. Before jumping in and getting involved it is best to first familiarize yourself with the most common type of lenders –
- Credit Unions: Credit unions are member-owned financial institutions. For those who are shareholders, they offer favorable interest rates. If you are not part of a credit union the membership restrictions are generally not too restrictive meaning you can most likely find one you can join in your area.
- Mortgage Bankers: Bankers who work for a specific bank which will process loans for the bank underwriters.
- Correspondent Lenders: These are often mortgage loan companies that while they can make your loan they usually rely on other lenders whom they sell your loan to immediately.
- Savings and Loans: These are much harder to find nowadays but these smaller financial are community oriented and can be worth the search.
- Mutual Savings Banks: Generally, locally focused they are competitive and like S&L’s they can be worth the search.
It is important to make sure that you do your research and know whether or not the mortgage company you are dealing with is registered in your state. You can do that through the Nationwide Multistate Licensing System Registry. Using the Better Business Bureau, you can find unbiased reviews and information.
- Know Your Facts
There is a lot of different options to choose from when finding your lender. So, choosing the best one can be tough. That is why it is important you ask the right questions to get the information you need. Narrow your choices by asking around and doing your research and once you get a handful of companies to go through a filtering process by asking relevant questions. Questions you should ask include:
- What are the down payment requirements?
- Are there any lender fees I will be responsible for at closing?
- Will any of those fees be waived or rolled into my mortgage?
- What are the turn around times for preapproval, closing, and appraisal?
- How do you communicate with clients and your response time?
Knowing the facts can help keep you in the know and keep you on the right path to choosing your best option. Remember that the lowest interest rate and costs shouldn’t be your only factors. Closing costs, loan obligations, and points should all be other factors you keep in mind also.
Reading the fine print of your loan documents can help clear up any questions you may have. These can tell you the exact terms of your loan including who pays closing costs, what items are and are not included in the home, home inspections, and other important details.
Choosing a mortgage isn’t easy. It is a decision that will continue to impact you for years to come so being sure that you chose the best option is important. By taking the necessary steps now you can ensure that you stay on time with your payments and will not face the possibility of foreclosure. Contact us here for more information!
Looking for a home? Get in touch with our top class real estate company. They have been in business for over 10 years helping new homeowners in the Orlando area and specialize in finding your dream home for the right price. Go here to contact them and learn more!