There are so many moving parts involved in getting a mortgage that it can be hard to miss out on all the little things you need to know that can help you as you’re navigating the process. And as much as you can count on your lender to let you in on a lot of secrets, there are some they just won’t tell you. At some point the onus is on you to become mortgage savvy.
For example, they’re not always going to encourage you to shop around for your mortgage or negotiate bank loan fees, which is a wise step to ensure you’re getting the best deal. Every lender has their own particular set of parameters they use to decide whether or not you qualify for a loan, and their own terms and arrangements that surround that loan. That means that what may seem like a deal may not be one if you compare them to another lender. But nobody is going to tell you that.
The onus is on you to have the courage and patience to do a comparison shop, but it’s a good way to ensure you’re getting the best deal for you. Just make sure you’re aware of all the terms, rates and requirements of each one so you’re able to make the most accurate comparisons and decisions.
The next thing you need to know? You have a limited amount of time to act once you lock in an interest rate on your loan. If you’ve run out of time, you can ask your lender for more time so you can keep the same interest rate as you work through the finality of securing your home… but they can charge you for that extra time. Double check with your lender about the fees they might charge you if you need a rate lock extension.
Everyone knows that having equity in your home is important, but what you might not know is it also counts during your mortgage application. To start, you should aim for at least 30% equity, if not more. The more equity you have, the better pricing you’re going to get on your loan. You’ll usually hear a lot about your minimum down payment, but not how much you should come up with to get the best rate on your mortgage.
Your next secret comes at the hands of your appraiser. While they operate independently of your mortgage lender, their assessment of your home’s value can influence your mortgage. If the appraiser determines your home is worth less than the purchase price, it can adversely affect your mortgage – but there are ways to work around it. Have your real estate agent pull some comps in the area that might not be in the appraiser’s report, and ask your lender for a “re-consideration of value” based on the information you found.
As always, talk with your lender about any questions or concerns you might have. And don’t be afraid to ask – even if it’s about one of these insider secrets.