New homeowners must look for mortgage lenders and information on that subject. There are many different kinds of companies of mortgage lenders. They include bank mortgage lenders, other lenders (mostly various types of finance company mortgages), and vendor ‘take-back’ mortgage lenders.
As a safe practice, you should always go through the process of ‘pre-approval’ with a bank or other mortgage lender. The process confirms your credit rating; provides you with the information about kind of interest rate you might expect to pay; and how much you can afford to spend.
The major differences between a bank, a credit union, and a finance company is the interest rate you pay, the services that are included, and whether you will qualify with the lender for a mortgage. It would be prudent to check up on the different options you have in terms of the lenders and the various schemes they offer. Even a difference of few percentage points could save you a lot of money over the life of a mortgage. You'll want to do some research to get the right one.
A mortgage is one of the biggest decisions of your life and it involves the largest financial transaction you will probably make, so you need to be sure that your mortgage lender is reputable. A low rate is good, but you need to understand whether this low rate is guaranteed and for how long, especially if you are in the pre-approval process. Don’t just assume a certain program will be right for you, and remember to budget for closing costs. Closing costs can be between 2 to 6 % of your purchase, depending on your lender's fees and other factors.
Remember to close toward the end of the month as upon closing, your lender will charge you prepaid interest for the date the loan is recorded through to the end of that month. Also, always read the fine print and check for hidden fees.
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