Finding the best mortgage lender on your journey to
homeownership is important. But it can be challenging, especially if you are a
first-time homebuyer. It’s a big deal because picking a lender is an important
part of the home buying process. And finding the best the right mortgage is
crucial. Here’s some excellent information from NerdWallet to help you navigate
this part of buying a home with confidence.
5 Things You Need to Know to Help You
Find the Best Mortgage Lender
NerdWallet says, “The best mortgage lenders for first-time homebuyers embrace government loans, offer low down payment options, charge reasonable fees, and help you find financial assistance programs.”
1. Know Your Credit
Score and Financial History
Lenders judge you on your credit score and financial history to determine your ability to get a mortgage and the interest rate you’ll pay. So you need to know it. Knowing your credit score allows you to determine your loan options.
Credit scores of 620 are good, and the higher, the better. Scores of 740 or more will help you get the lowest interest rates. But it’s not impossible to get a mortgage with a credit score that’s in the 500s.
Find out the credit score you need to buy a house here. But keep in mind, you may be able to borrow more than what you can actually afford to pay each month. So don’t overextend yourself from the get-go!
2. Inquire About
First-Time Homebuyer Programs in New York
Some lenders and state housing finance agencies partner up in order to help first-time homebuyers. Then they can help you with rate discounts, a down payment, and closing costs, or educational resources to help you get into a home. Isn’t that nice to know? So do your research on assistance first-time homebuyer programs here in New York.
Take note: Not all lenders participate. So be sure to ask.
3. Look for Lenders
Who Offer Government-Backed Home Loans
Why? Because most of the time, FHA, VA, and USDA loans offer relaxed income, credit, and down payment requirements. And this allows for easier qualification. But check out this list of homebuyer loans and programs! You could rack up some big savings if you don’t rush through this process.
- FHA loan
- VA loan
- USDA loan
- Fannie and Freddie
- State first-time homebuyer program
- Home renovation loan
- Good Neighbor Next Door
- Dollar Homes
And on another note, not all lenders offer FHA, VA and
USDA home loans. Their options may be limited. So, when you do your comparison
shopping, always ask about availability.
4. Ask for Quotes to
Compare Interest Rates
Ask several lenders for quotes (at least three), and let
them compete with each other for your business. One of them will rise to the
top of your list with a lower rate and lower fees. You’re looking for APRs (annual
percentage rates) to get a better picture of what you’ll end up paying over the
life of the loan.
You’re also looking for fees when making lender comparisons.
Application, appraisal, title, and loan origination fees affect closing costs.
And they vary widely depending on the lender.
Again, don’t rush through this process either. Mortgages
have pages and pages of details that loan officers know how to get through
quickly. Ask for clarification as needed through every step and make sure you
have all the facts. Choosing a loan that matches your needs and your budget
with confidence isn’t something you should feel rushed through.
5. Get Preapproved
Getting preapproved before you begin house hunting helps you
in three ways:
- Proves a lender is willing to loan you a certain
amount of money - Signals to the seller that you are a serious
buyer who they can rely on - Helps you look for homes within your budget
Compare preapproval options,
too. Some lenders provide approval online in minutes. Others require a phone
call or that you visit a local branch office to pick up your documents in
person.
Be prepared. You may run into preapproval barriers. If you
have a low credit score or inconsistent income, ask lenders before you apply if
they’re willing to work with you on this. Some lenders will gladly help you
find errors and discrepancies on your application which could get you
preapproved.
Lacking Confidence in Your Search for
the Best Mortgage Lender?
Are you stumped trying to find the best mortgage lender? When you’re a first-time homebuyer, shopping for a mortgage lender can get overwhelming. Just take time to compare all your options, no rushing through the process. You’ll buy a home with confidence and save money, too.
Contact me, Charles D’Alessandro, your Brooklyn Real Estate Agent with Fillmore Real Estate with questions you have about finding the best mortgage lender. I can help. Call (718) 253-9600 ext. 206 or email charles@brooklynrealestatesales.com today.
Charles D’Alessandro
Your Brooklyn Real Estate Agent
718-253-9600 ext. 206
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