Rockland County Homebuyers: 4 Things You Need to Know When Obtaining a Mortgage

Rockland County Homebuyers: 4 Things You Need to Know When Obtaining a Mortgage

First-time Rockland County homebuyers are often so concerned about shopping around for their house that they forget that they can shop around for a mortgage. Not all mortgages are the same, and it is your job to find the one that will work the best for you.

The process might not be as fun as looking for a Rockland County house, but it can save you a lot of money over the years.

Here are four things Rockland County homebuyers will want to keep an eye on as you shop around for a mortgage.

1. Are you ready for a mortgage?

You should start looking for a mortgage at least three months before you are ready to buy a house. By meeting with a mortgage lender at this time, you will be able to find out how your credit looks and what type of mortgage you can qualify for. This will also give you time to improve your credit score to obtain a lower interest rate.

2. Check the rates

Not all lenders will have the same rate, so take the time to shop around to obtain the lowest rate you can find. When you are looking at interest rates, it might not seem like a slightly lower interest rate would make a large difference, but it does.

For example, if you are paying 4% on a mortgage over 30 years for $200,000, you will end up paying over a $140,000 in interest. With that large of an amount even just a slight drop in the interest rate can make a big difference.

3. What are your closing costs?

Different lenders have different fees, and those fees can really add up. Some fees are non-negotiable, but others will vary from one lender to the next. On average, closing costs can range from 2% to 7% of the total sales price of the house.

Take the time to interview several lenders. They will provide you with good faith estimates. This document will show you the breakdowns what you will be paying based off the terms of the mortgage. It will show you the amounts, including interest rate and fees.

Some of these fees are from the government and the lender has no say in them. Other fees are set by the lender and they have the power to negotiate on them a little.

Keep in mind as you shop lenders that if your lender is pulling your credit, it will be a hard pull, which can affect your credit score by a few points each time. This is something your credit score can easily recover from, but you will want to limit the number of lenders that you allow to do this.

4. Remember that rates change

Some lenders will allow you to lock in interest rates for a short period of time. Since rates are not guaranteed, this can be a nice advantage of one lender over another. Your pre-approval will generally be good for up to 90 days, but the length of a rate lock can be anywhere from 30 days to 90 days. Make sure you compare this between lenders.

Rockland County homebuyers should remember that there is not one mortgage or one lender that is right for every person. Choose the lender that you are comfortable working with that also offers you a competitive mortgage. Don’t be afraid to ask questions so you understand exactly what the process is and what you will be required to pay.