Best way to shop for a mortgage

Best way to shop for a mortgage

Article by Mortgage Guru

Unless you’re Bill Gates, you would probably need some help in order to buy a home. In the olden days, folks would probably go to the nearest bank or lender that they knew of, perhaps the one in their neighborhood. But today, with banking institutions mushrooming all over the world, it would probably be wise for you to shop around for mortgage loans since different institutions offer different packages and eligibilities. There isn’t a sure formula to the best way to shop for a mortgage, but there are certainly some good ways which we could try: meet the banker, tele-shopping and online shopping. Meet the bankerIf you have the time, you may go from bank to bank to meet with their consultants and discuss the types of mortgage loans that they have to offer. Some people have the notion that the bank they are currently with (maybe they have current and/or saving accounts or credit cards with a certain bank) may give them the best offer, since they are existing customers. This may not always be true so it can be a good idea to check out other banks as well. However, you may want to do some research before meeting the bankers; you would appear more professional and your time will also be better spent. Tele-shoppingMaybe you have the time, but banks and lending institutions are not always situated in the same areas so travelling might be a problem. That’s fine, because as long as you can find the banks’ contact number, you may simply call and enquire via the phone.Online shoppingSince nearly all institutions nowadays have their own websites, you may also look around at their websites to find more information. Any comparison can be easily made over the Internet and you can also read about other people’s opinion regarding the issue. Also, you can probably find other lending institutions that you have probably not heard of before this, but bear in mind to authenticate any information you gained online before acting on them. Applying for mortgage loans may not be as easy as it sounds. There are many procedures involved and mortgage regulations are getting stricter each year. So aside from shopping for the best mortgage plan, you might also want to shop for other mortgage-related information such as the mortgage loan limits. Fannie Mae, for instance, has different loan limits for its conventional mortgages like a loan limit of 7,000 for a single family residence loan. There are also other guidelines that may be worth researching for. To get a mortgage, or rather to increase your chances of getting one, you may try getting a pre-qualification first. Pre-qualification can help to determine a rough figure on the amount that you may borrow and pay as down payment. The lender can probably also estimate the rate of interest that you can likely receive based on your credit scores, income, payment history and so on. It is usually not necessary for you to have proofs of documentation at this stage. After being pre-qualified, you may also get pre-approved. This is where you have to show proofs of documentation, so the lender can verify all the details instead on relying on your claims. Again, like pre-qualification, a pre-approval does not equate to an approved loan application but these are steps you may take to increase your chances and to ensure that you are fully eligible for the mortgage loan.

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