Have you found your dream home? Maybe you’re already living there but are struggling to pay for it. Whatever your reasons for looking into home loans, here are five tips for making smart choices and getting the most out of your mortgage.
1. Document Everything
You’ll want to be especially careful with your paperwork since new mortgage regulations went into effect in January 2014. Document absolutely everything related to your loan including applications, tax returns and personal financial records. Make copies of everything for both your broker and yourself.
2. Understand the Business
You don’t need to be an expert in the world of home loans, but if you aren’t familiar with terms like “principal,” “refinancing” and “debt-to-income ratios,” you should do some research before committing yourself to a mortgage. The more you know, the more you can understand and negotiate with your broker.
3. Stay Local
Not only do interest rates vary by region, but you also want a local brokerage firm that works with the unique challenges and demands of your state’s real estate market. If you’re looking to take out a mortgage in Baltimore, for example, look for something like Embrace Home Loans in Maryland.
4. Shop Around
You don’t have to accept the first offer you’re given. Don’t be afraid to compare and contrast interest rates or debate with your broker about adjustable-rate mortgages as opposed to fixed-rate mortgages. This is your own future that you’re investing in, so shop around until you’re satisfied with the terms.
5. Know Your Rights
Again, since the Consumer Financial Protection Bureau has changed many mortgage regulations, it’s more important than ever that you’re familiar with your rights as a borrower. Research the changes, and ask your broker how they apply to you.
Whether you’re buying your first home or just looking to renovate the one you already have, make sure that you’ve done your research and considered all the possibilities before signing on the dotted line.