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In Murrieta, Temecula Valley, and the Inland Empire, mortgage regulations have undergone significant changes in recent years, expanding your options. Small adjustments in your approach to mortgage shopping and the way you structure your mortgage can translate to savings of thousands of dollars and years of expenses.
Stay Informed About Mortgage Changes
Whether you’re a first-time homebuyer or planning a move, staying informed about these changes is crucial. Industry research has uncovered 6 common buyer mistakes in mortgage shopping that could significantly impact the outcome of this critical negotiation. Handled correctly, these issues can lead to a mortgage that costs you less over a shorter period.
6 Buyer Mistakes You Must Avoid Before Obtaining a Mortgage
Before you commit your hard-earned dollars to monthly mortgage payments, consider these 6 buyer mistakes. Effective consideration of these important areas can make your payments work much harder for you.
1. Get Preapproved for a Mortgage Before You Go Looking for a Home
Preapproval is easy and can give you complete peace of mind when shopping for your home. Your local lending institution can provide you with written preapproval at no cost and no obligation, often over the phone. More than just a verbal approval, a written preapproval is as good as money in the bank. It includes a completed credit application and a certificate that guarantees you a mortgage to the specified level when you find the home you’re looking for.
2. Know What Monthly Dollar Amount You Feel Comfortable Committing To
When you discuss mortgage preapproval with your lending institution, find out what level you qualify for, but also pre-assess for yourself what monthly dollar amount you feel comfortable committing to. Your situation may give you a preapproval amount that is higher (or lower) than the amount of money you would want to pay out each month. By working back and forth with your lending institution to determine what this monthly amount is and what value of home this translates into at today’s rates, you won’t waste time looking at homes that are not in your price range.
3. Consider Your Long-Term Goals and Expected Situation
Think about your long-term goals and expected situation to determine the type of mortgage that will best suit your needs. There are a number of questions you should ask yourself before committing to a mortgage. How long do you plan to own this home? What direction are interest rates going, and how quickly? Is your income expected to change (up or down) in the near term? The answers to these questions will help you determine the most appropriate mortgage for your needs.
4. Understand Prepayment Privileges and Payment Frequency Options
More frequent payments (e.g., weekly or biweekly) can literally shave years off your mortgage. Simply by structuring your payments to come out more frequently, you can significantly reduce the amount of interest charged over the term. Authorized prepayment of a certain percentage of your mortgage or an increase in your monthly payment can also have a major impact on the number of years you will have to pay, shortening your payment term considerably. However, not every mortgage includes these prepayment privileges, so make sure you ask the right questions.
5. Ask If Your Mortgage Is Both Portable and/or Assumable
A portable mortgage, where available, is one that you can carry with you when you buy your next home, avoiding discharge penalties. An assumable mortgage allows the buyer of your home to take over the mortgage, making it easier and more desirable for them to buy your home and saving you any discharge penalties.
6. Consider Dealing with a Mortgage Expert
Consider dealing only with a professional who specializes in mortgages. Their services can significantly impact the cost and effectiveness of the mortgage you obtain, making the process faster and avoiding costly delays. Typically, there is no cost or obligation to inquire.
To Discuss Your Home Sale or Purchase, Call or Text Today and Start Packing!
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In addition to providing free educational resources, real estate tools, and property hotlists, we are here to answer any specific questions you may have. For the absolute best realtor in Temecula Valley, and the surrounding Southern California areas, contact David Limon at 951-421-1229 today and start packing!
