With possible signs of improvement repeatedly being observed in the national housing market, an abundance of lending companies looking to help consumers along the path to homeownership may offer a variety of deals. While some organizations, such as Freedom Mortgage, sincerely wish to assist Americans, others are considered predatory lenders and can decimate a first time home buyer’s savings through dubious business practices and unrealistic payment plans.
Carefully examining the critical elements of a home loan – before signing it – will help you to choose the offer that best suits your finances and won’t strain your savings.
Know your optimal monthly payment size
Depending on the length of the plan you wish to enter into, your mortgage rate may vary greatly. Adjustable-rate mortgages may seem like the most economical deal, but rates can change after a short period and your overall cost will rise. Fixed-rate mortgages usually afford borrowers with low rates, but they can be drawn out over decades. Calculate your current monthly budget and determine how much money you could afford to pay toward the loan now as well as the in the future.
Examine possible fees, penalties, additional costs
Some companies offer competitive lending rates, but charge borrowers with additional fees upon finalizing the agreement. If applying for an FHA loan, you have the government watching your back – but they don’t account for hidden costs. Some lenders enforce prepayment penalties, which punish borrowers for attempting to pay down their mortgage ahead of schedule.
Research the lending companies
A quick internet search can provide a plethora of customer reviews of a lending service provider. While most consumers only go online to report of negative experiences, simply typing in “freedom mortgage comments” will afford you many positive reviews of the trusted lender. Companies with an exorbitant amount of poor customer ratings should immediately be ruled out of your home loan research, and avoided at all costs.
Ask an area financial professional
Many trustworthy brokers are happy to help consumers find the best deal and, if queried, will suggest a lender. If going this route, you should be careful to first research average mortgage rates, as some brokers will make more money off setting up the deal by locking you into paying at a higher rate. Alternatively, some may be able to find you deals with significantly lower rates.
Staying informed is the first step to making the right choices on your path to qualifying for a mortgage. Freedom Mortgage offers mortgage trend updates every weekday that really help your extend your knowledge whether you’re refinancing your mortgage or comparing mortgage rates.
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