From waving goodbye to troublesome landlords, to endless decorating possibilities, the transition from renting to homeownership is an exhilarating one. However, many first-time homebuyers find the path to homeownership trickier to navigate than initially expected. Once you’ve purchased a home you’re in it for the long haul so before making any decisions, it’s important to choose a mortgage company that best meets your needs. After all, you’re entering into a financial relationship you could be committed to for the next fifteen, twenty or even thirty years.
That’s why, at Delmar Financial, we’ve compiled a short guide to help you sidestep some of the common mistakes homebuyers make when selecting a mortgage company.
Preparing for Your Search
Your financial status is of critical importance when applying for a mortgage loan. The more information you are able to provide a lender with, the easier it will be to navigate the complicated mortgage application process. Putting together a financial portfolio containing a summary of your current financial status for potential lenders can be an enormous help in getting the ball rolling. Your portfolio should include:
- 2 years of tax returns
- 2 years of W2s
- 2 recent monthly bank statements
- 2 recent paystubs
Once you have gathered your financial data and are familiar with your financial status, it is important to have a basic understanding of your mortgage options and which options make the most sense for your situation. Ask yourself questions such as:
- How long do I anticipate owning my home?
- Am I interested in a single family home or a condo?
- How much money do I have for a down payment?
- Where do I want to live?
- How much do I want to spend and what is my time frame for purchasing?
Have an idea of how much annual property taxes and homeowners insurance are in the locations you are interested in, as well as a basic understanding of terms such as lender fees and “Good Faith” estimates.
You have a seemingly unlimited number of options when it comes to selecting your mortgage lender, which is why it’s important to do your due diligence. Ask friends, family and your real estate agent for recommendations of reputable lenders, and check out lender reviews online. Additionally, the National Mortgage Licensing System & Registry maintains a website offering consumers a free way to confirm administrative and licensing information for state regulated mortgage lenders in all 50 states.
Compile a list of questions to ask your prospective mortgage lenders, such as what their interest rates are, the loan durations for the types of mortgages you are considering, and request “Good Faith” estimates— written explanations of the estimated charges, costs and fees the lender requires at closing. Additionally, confirm with your lender they are able to meet commitments and closing date deadlines and ask if they require any upfront fees. Be sure you understand and receive an explanation of all necessary terms and jargon in order to make an informed decision.
When narrowing down your choices of lenders, compare the offered interest rates and fee structures for the types of mortgages you are considering, and have a thorough understanding of each loan type being offered. It is, generally, in your best interest to select the most reputable lender that offers you the most inexpensive combination of interest rates and fees.
At the end of the day, you’re running the show. And with so much at stake, feeling 100% comfortable with your choice of mortgage lender is of the utmost importance. With 50 years of experience under our belts, at Delmar Financial, it’s our mission to work with you to develop a comprehensive mortgage strategy that best enables you to achieve your goals and dreams in homeownership.
You can get the answers to any lingering questions you might have and more by contacting one of our mortgage loan experts today at (314) 434-7000. Together we can turn your mortgage loan goals into a reality!
Ready to take the plunge? Get started online today with Delmar Financial!