The way you approach mortgage shopping can literally save thousands of dollars. Take time to understand the system and make educated decisions. Doing so may very well cost you less over a shorter period of time.
If we can explain any steps along the way, please ask. We're always happy to help.
The steps to successful financing
Get pre-approved. Pre-approval is a fast and simple tool for you to use when you are deciding which Puyallup, WA, home is the best for you. When you visit the lender of your choosing, they will have you fill out a pre-approval. This pre-approval will let you know exactly how great of a mortgage loan you qualify for. Ultimately, this tool will help you save money and time in the long run. Make sure that you have your pre-approval done before you make an advance in buying your Puyallup home.
Examine your finances. Examining your finances and your budget is an important step to take when you are considering buying a home in Puyallup. Before you even consider buying a home, take a second to organize your budget and decide if now is the right time. Make sure you put together an organized budget that includes your potential mortgage payments.
Consider what type of loan is best for you. There are many types of mortgage loans available to homebuyers. Two of the most popular types of mortgage loans are fixed-rate and adjustable-rate loans. Fixed-rate implies that the mortgage loan you will be acquiring has a fixed rate throughout the years that you are paying it off. An adjustable-rate loan suggests that your rate heightens and lowers as the loan rates do. Each of these type of loans can be beneficial, it just depends on the type of loan that will fit your lifestyle best.
Check your Credit Report. Checking your credit report before your lender does is a crucial step in the purchasing process. Read through your credit report and make sure that there are no inaccuracies. Clear up inaccuracies if you have them. Try hard to ensure that your credit report looks beautiful so that your lender feels good about your transaction.
Shop Around. Don’t settle on the first home you see, shop around! View lots of different homes and find out which homes suit you and which don’t. Try not to be too picky with your search, but make sure that the Puyallup home you’re interested in is one that you can see yourself in for a long time.
While you're shopping for a loan, also look for the best loan costs. These may include:
• Interest rates
• Broker fees
• Points (each point is one percent of the amount you borrow)
• Prepayment penalties
• Loan term application fees
• Credit report fees
• Appraisal costs
Be aware. Don’t let hidden costs sneak up on you. Make sure that you thoroughly read through contracts and make sure that every agreement is written down.
Apply for a loan. Gather all the documents your lender will need in order to determine your eligibility for a mortgage loan. These may include job tenure, employment stability, income, assets, and liabilities. They will also be interested in any debt that you have acquired.
Lock it down. With interest rates changing daily, locking down your rate can prove a big money saver. A rate lock - in writing - guarantees you a certain rate and terms for a specified period of time. Lock in all the costs you can, including interest rates and points. And try to set the lock at the time of application, not at approval. This will protect you from rising rates.
Your lock-in period should be long enough to allow for all processing time. Most lock periods range from 15 to 60 days. Make sure to check with your lender or broker about the average time it takes them to process a loan.
Ask about Pre-payment. Prepayment is an option that can ultimately shave off years of your mortgage loan.Paying more frequently or adding a little bit more money to each payment can save you thousands of dollars in interest, so ask about prepayment when you are applying for your loan.
Clear up any financial problems. Do you have credit problems or owe money to the IRS? Buying a new home may still be a possiblity. Contact a financial advisor or tax resolution service to find solutions.