For the typical Atlanta-area resident, buying a home represents one of the most important financial decisions anyone can make. First, you must determine how much you can afford to pay each month. According to the Federal Reserve Board, the calculation should comprise the loan payment, property taxes, insurance and monthly maintenance and utilities. Undoubtedly, you already understand the importance of shopping around to find the best mortgage.
Here are some tips to help you obtain the best deal:
Check your credit report
Find out what information your credit profile contains before you sit down to talk to a loan officer. Federal law requires each of the three major credit bureaus — Experian, Equifax and TransUnion — to provide you with one free credit report each year. Get a copy and evaluate it carefully.
If your report contains any blemishes, you will need to make the necessary corrections, if possible. Examples include wrong personal information, an inaccurate account balance and payments that were wrongly reported as being past due. Write to each credit bureau and request the removal or correction of disputed information.
When investigating your credit history, be sure to get your credit score as well. Use it when you contact other lenders to prevent making too many inquiries on your credit report — checking your credit score too often could actually lower your score.
Greg McBride, the senior financial analyst at Bankrate.com, advises those shopping for mortgages to avoid opening up any lines of credit and closing any out. This rule can be extended to opening new bank accounts, moving money between accounts and leasing a car. And of course, always pay your bills on time.
Fixed-rate or adjustable-rate mortgages
You should also know which type of mortgages are available. The 30-year, fixed-rate mortgage is the most common type for homeowners because it provides predictability. Monthly payments remain stable throughout the term of the loan, and some banks offer shorter terms, such as 10- and 20-year loans.
Adjustable-rate mortgages offer borrowers a lower initial interest rate compared to fixed-rate loans. However, the interest rate may “reset” each year, which could increase your monthly payment.
Shopping for the best mortgage
Contact at least three lenders. Compare rates, terms and fees, as well. An “advertised rate” may sound great, but that low rate might be reserved for borrowers with the top credit scores or may not include fees.
Nonetheless, rates, fees and other items can be negotiated. If you find similar rates and loan terms across different lenders, focus on final costs. Banks have more wiggle room with document preparation fees, points and other charges.
Getting a mortgage can feel like a lengthy process, but these strategies can make it easier to find one that works best for you. Contact as one of your mortgage options preferred mortgage company Duffy Home Loans, LLC.
Damian WarwickBranch Manager, NMLS #182609Phone: 678-948-8654Email: [email protected]@gmail.comwww.DuffyHomeLoans.com2050 Marconi Drive, Suite 300, Alpharetta, GA 30005NMLS ID #117369 Georgia Residential Mortgage License 40088
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