When you’re shopping for Providence property, it’s easy to get caught up in the excitement of choosing a new home, especially if it’s your first experience buying a house. However, you should be doing as much research on your mortgage lender as you are on the house itself. There are lots of questions to ask to make sure you’re getting the best deal. It’s a good idea to talk to at least three different lenders so you have a sense of what is available to you and how different lenders approach the loan process.
Research Several Lenders to Get a Good Deal and Be Happy Living in Providence
First of all, you should give the broker a picture of your financial situation, the kind of Providence property you want to buy, and how long you want to stay in the area. The lender should be able to tell you if what you want is reasonable and what types of loans are available to you. They should also be able to tell you if there are any special programs open to you. Should you go for a conventional loan or an FHA loan? If you’re a veteran, maybe a VA loan will be the best deal.
You should also discuss how big a down payment you need. If you can do a 20% downpayment, it’s a great idea, because it will save you from having to get mortgage insurance. However, there are many loan programs that allow for a 3% down payment or even no down payment.
Then you want to find out about all the fees they charge on the loan--the origination fee, closing costs, and any other fees they charge. As for a loan estimate that includes all the fees so you can compare the different lenders.
You want to find out the brokerage’s rate lock policy, which gives you peace of mind about what your interest rate will be. Be sure to get the policy in writing. Ask what your monthly payment will be, and make sure that includes things like property taxes and homeowners’ insurance.
Finally, ask if the lender will give you a pre-approval letter. This means that your credit, income, and employment have all been verified by the lender and they are willing to loan a certain amount of money. Having a pre-approval letter will make you a much more attractive buyer.
If you’re interested in living in Providence and need referrals for a good lender, give us a call.