The Mortgage Basics

Written By: Jackie Smith on October 2, 2009 4 Comments

by Jackie Smith

Buying a piece of land, or a new home, is up there with life changing events such as a marriage or a new born child. This can be a nervous time for some; therefore you need to know what you should look for when you are shopping around for a mortgage. Hopefully this information will help you.

Mortgage Lenders

Once you have signed your mortgage contract, it will become part of your life for years. Therefore you want to make sure that you have a good interest rate and are working with a reputable lender prior to signing anything. You should put in a few hours, if not days, researching the various lenders, find out if they are a qualified lender or one that is deceitful.

Getting first hand information from your personal acquaintances about their experiences with the lender will allow you to vet any claims the company may make with actual results. If you find that your neighbors or business acquaintances experiences match what the local bank or investment firm says in their literature, you’ll know that you have a reasonably trustworthy lender. You should employ this same strategy when researching a lender who lives out of your immediate geographical area. Try to talk to people who have used that company or bank and find out what their experiences are.

Rates and Quotes

Once you’ve identified a few trustworthy lenders, the next thing to do is to ask for mortgage quotes. This quote will be based on several factors, including your credit history, the federal reserves nationwide interest rate, and what the bank is offering in terms of rates. You will want to get several quotes in order to find the lowest A.P.R, or annual percentage rate, on your mortgage.

Essentially, the APR is the amount of interest that will be charged on your loan. If you have a $100,000 loan and a 5% A.P.R. for 30 years, for example, that works out to a total interest charge of $5,000 a year multiplied by 30 years, which is $150,000 dollars. A change in percentage points makes a huge difference in the total amount of interest you will be paying, so shop around! The better your credit history, the more leverage you will have in negotiating a better deal. However, there are always special incentives being offered depending on specific geographical and demographic data. Investing a significant amount of time in rate-hunting will ultimately save you money, and help you buy the property you’ve always wanted.

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When purchasing a new home you want to be sure that you have appropriate homeowners insurance. You can receive various insurance quotes by visiting www.quotefinancial.com.