With near historic low interest rates, becoming a homeowner has rarely been more affordable. Since buying a home is probably the largest financial transaction you will ever make, you will want to avoid the pitfalls common with first time mortgage buyers.
The first order of business should be to speak with a qualified mortgage agent or broker. Your bank can offer you a mortgage, but it will rarely be the best deal available. A mortgage broker works with banks as well as other lenders like trust companies, finance companies and private lenders. With any major loan, you will need to fill out an application and have a credit report pulled. When you shop around on your own, this can be quite time consuming, and may raise flags to lenders when multiple credit reports are pulled in a short amount of time. When you work with a mortgage agent, you only fill out one application and they shop your loan over the multiple lenders. A mortgage broker can usually find lenders for hard to place mortgages like first time buyers, self employed or poor credit.
A mortgage agent will also provide you with expert advice to help you get the best mortgage loan for your needs. While low interest rates are on the top of everyone’s list, other factors like payment plans, fixed versus variable interest rates and penalties must be taken into consideration.
If you have not yet purchased a home, it pays to get a pre approved first mortgage. Not only can you shop with confidence know how much you can afford, you can usually lock in an interest rate for up to 120 days until you find your dream home. A mortgage lender can also be an invaluable source for other real estate contacts, and recommend lawyers, real estate agents, contractors or home inspectors.
Knowledge is power and having a qualified mortgage expert on your side will help you avoid pitfalls in getting a first time mortgage.