Lending Tips to get you the best Loan

When considering buying a house, start by adding to your savings account a year prior to actually buying. You need a good savings for 2 reasons: 1- Any money required at closing will have to already be established prior to the loan process. You cannot incur more debt in order to put money down. 2- Once you have enough money saved to pay for closing costs, the money left over can be put towards the loan-the more paid toward the loan up front, the lower your monthly payment-.

Three to four months before actually buying you need to get pre-approved. This does several things for you. It allows you to know how much lenders will loan you and also it lets you find out where you stand with your credit report. Knowing how much of a loan you can qualify for up front gives you an amount that you can shop for houses with. You know which houses you can and cannot buy. If you can’t get pre-approved, find out why. It can be due to something being reported negatively on your credit report. Find out what that is so it can be fixed and you can then move on in the buying process.

Get a good faith estimate from the lender. Typically when you are trying to get pre-approved you will get what is called a Good Faith estimate from the lender. This serves several purposes. 1- It tells the buyer what the costs will be paying for when you pay closing costs. Examples may be application fee, title search fee, appraisal fee, etc. 2- It lets you take this estimate to other lenders and see how each offer stacks up.

Negotiate. Several parts of the mortgage loan process are negotiable. Everything from the points, percentage rate, fees paid by you or the lender, the amount to be presented at closing….tons of money can be saved if you know the right way to negotiate your loan. Negotiating with one lender usually doesn’t work very well, but taking the good faith estimate from one lender to the next can get fee’s waved, ultimately saving you money and that lender getting your business.

Lastly, find out what kind of special offers exist. Also, ask how much different the monthly payments will be on a 15yr vs. 20yr vs. 30yr mortgage. You can save thousands of dollars by doing a shorter term loan vs a 30 or 40 year mortgage.

Good Luck and Happy Buying!