Preparing for the Application Process: Mortgage Facts That Can Help

The entire mortgage process can be very confusing and a cause for worry for many but knowing a few simple facts before you start the application can help prepare you to be successful. In this article, we will go over some of those facts to make the process of getting a mortgage for your new Fort Lauderdale home easier and less stressful.

You Can Refinance Your Home

If signing a fixed rate mortgage makes you nervous, you should know that you can refinance if the rate that you sign on with ends up being higher than the interest rate later on. However, the ability to do this does depend on how long you have had your mortgage and if you still qualify financially.

Learn About APR and What Yours Will Be

By calculating your annual percentage rate (APR), you can determine what the overall cost of your house will be throughout the life of your home loan. This will help you make decisions such as if you should make extra house payments or put massive windfalls of money into the home to help save money in the long run.

The Financial Institution That You Borrow from May Sell Your Mortgage

Sometimes your original mortgage lender sells your home loan to a new financial institution. All this means is that your bills may come from a different bank, or your mortgage paperwork could be titled to a different lender; however, the terms of your loan can not legally change.

Each Lender Has Unique Costs

Every mortgage lender, not just those in the Fort Lauderdale area, have their own set of rules that dictate qualification for a loan through them as well as fees for the home loan process. When you are shopping for a mortgage, it is always best to ask about these fees and not just about the mortgage rate itself. Here are some of the charges that can vary depending on the lender that you choose. • Application Fee • Loan Origination Fee • Closing Cost Fees • Lender Fees • Document Fees

Mortgage Rates are Constantly Changing

Mortgage rates fluctuate daily as they are impacted by the economy, local housing markets, and the borrower’s finances, and each lender offers different interest rates. When you shop for rates, it can be helpful to get them locked for a set number of days while you compare and look for a home.

Your Credit Score Really Does Matter

Many factors determine your worthiness of loan approval. One of the essential things that a lender looks at is your credit score. However, as a borrower, your credit score determines a lot more than just your approval or denial. In fact, as you go through the mortgage process, you will find that it affects the loan term, the amount of a down payment you have to pay, and can also drastically alter the interest rate your lender offers

You Can Lower Your Closing Costs

Depending on the mortgage program you are using, you may owe less closing costs than you thought. You can also negotiate that the seller pays some of the closing costs as well. Be sure to talk to your lender about the options they provide to include some of the closing costs in your home loan. It is likely with one of these options you can reduce the portion you have to pay upfront for closing on your new house.

Getting Better Mortgage Rates is Possible

There are a few ways that you can get a lender to offer you better rates. Having a lower interest rate, by even just a few points of a percentage, can mean a savings of thousands of dollars over the term of your loan. Here are a few ways to get a lower interest rate.

  • Having great credit

  • Choosing an adjustable rate mortgage

  • Accepting a shorter-term loan

  • Placing a more substantial down payment

Bankruptcy and Foreclosure do not Mean that You Cannot Get a Mortgage

The rumors that having a past bankruptcy or a foreclosure in your financial history prevent you from obtaining a mortgage just aren’t true. Multiple home loan programs are available for people who need a leg up or who might not have the best credit. If this is the case for you, be sure to talk to your lender about the options they may have for you.

Low and $0 Down Payment

Among the variety of mortgage programs that are available some allow for rather small down payments. In fact, some programs even have $0 down options. Again, you should talk to a lender about these programs and your qualifications for them.

Choosing the Best Lender

Here at DDTMM, we have an experienced loan team that can discuss your financial profile with you as well as the mortgage rates that we offer here in the Fort Lauderdale area. Contact us today, so that we can assist you with the mortgage process.

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