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5 Things You Must Know about Buying a House

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If you are preparing to buy a house, you’ve probably researched the home-buying process and what you can expect. But there may be a few tips you might have missed. Here are the five things that you should absolutely know before buying a home:

  1. You are not going to get the baseline rate set by the Federal Reserve. This is a baseline, remember. Many buyers will watch the fluctuations of this baseline and buy only when they think that rate is favorable. Here’s why this is an issue: your rate is based on a range of different variables (your credit score, for instance).  The Federal Reserve baseline is another of those variables.
  2. You probably do not need as much for your down payment as you think. In the past, you might have needed 20% of the house’s total price as your down payment. Today, you could pay as little as 3%, depending on what type of loan you choose and what your lender expects.
  3. Set aside your down payment as early as possible. Even if the seller is not particularly motivated to sell, once they accept your offer, they are probably going to want their deposit as quickly as possible. This will usually come out of your down payment. You want to have this money on hand so that when the seller accepts, you can make the payment without delay.
  4. Get an inspection, even if it is not required. Many buyers will skip the home inspection if it is not absolutely required by law or regulations. Get one anyway. This will make sure that the seller has left the home in the condition that you expected. It also gives them the opportunity to fix any issues that should be remedied before you move in.
  5. Ask about seller concessions. If a seller is being stubborn about their price, there are ways that you can get them to compromise. If you are willing to meet their price, even if it is higher than what you wanted to pay originally, ask the seller if they are willing to pay your prepaid interest points or your insurance fees.

Advertised Mortgage Rates: Don’t Always Believe What You See

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Rate Sharks: Misleading Advertised Mortgage Rates

Rate Sharks: Misleading Advertised Mortgage Rates

Advertised Mortgage Rate: Don’t Believe the Sharks

When you are looking to buy a property for the first time, you may be drawn in by the great advertised mortgage rates. Unfortunately, advertised mortgage rates are not always as they seem. There are many reasons the advertised mortgage rates may not be applicable to you, and in most cases there are very few who can take advantage of the great rates you see posted online.  Just read the fine print. I would like to tell you why and how you can get the best mortgage rate for your circumstances.

The first affecting factor is paying points. A point is a fee equal to 1% of the loan amount. If you are borrowing $100,000 a point is $1,000.  Most of these rates have you paying two points.  That is a huge cost!

The second is your credit score. A higher credit score generally means you will be more likely to receive a lower rate than someone with a lower one. A moderate credit score is about 695, but you would often need a score of above 740 to be eligible for the advertised mortgage rates.

Your credit score can differ from one credit bureau to another, which means it can be difficult to find out your own credit rating accurately. Although many lenders will use FICO, there are others that will use another credit scoring service such as Experian or TransUnion. They are all rated in different ways, for example Equifax have a score from 280 up to 850 but Experian’s goes from 360 to 840.

The term of your loan is also a contributory factor. If you take out a loan under 20 years you would pay a lower rate than you would if you were to spread repayments over 30 years.

We can help you to get the best rates possible for your circumstances.  As brokers we can choose from many lenders based on what you qualify for and have the tools to find out in real time. Many of the offers are time sensitive so it is important to have someone professional on your side who can keep you abreast of the changes.

We choose not to post any advertised mortgage rates as they just don’t make sense.  We take a personal approach and don’t bait and switch.

When you feel the time is right to take out a mortgage on your future home or investment property give us a call.

 

Buying a house? Why the mortgage rates online are deceptive.

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Mortgage Rates Online are Deceptive

Mortgage Rates Online are Deceptive

Buying a house? Why the mortgage rates online are deceptive.

For a few years now there have been many warnings (consumer reports) that warn the public about those companies who advertise mortgage rates online or in the newspapers and on billboards. They promise sensational mortgage rates. As wonderful as those rates are, they are deceptive to the majority of the public seeking home ownership.

The truth is that the process of in which you obtain a mortgage rate isn’t a cookie cutter process. Not for anyone.These advertisements give the false impression of the actual cost of home loans, and that sits on a fine line of violating federal law.

We do what is right, and avoid quoting a rate until we are sure you qualify for it. When we do quote it, you get the best rate in the market that you qualify for.

The Truth About Rates

Mortgage rates fluctuate. Many of these advertising low one percent rates fail to tell those seeking them that they do not stay at that rate. They go up after a period of time, and they go up substantially.

Every person does not qualify for these rates like these ads advertise. Each rate is based on the Consumer profile. This includes your credit score, debt ratio, and occupancy, the type of property, such as a single family home, a condo, and townhome. Also, the type of loan you are seeking. All of these greatly affect the rate you may receive.

Having a high credit score is great, but it does not necessarily guarantee the lowest rate either. If you have a considerable amount of debt, it brings the rate up. These ads and quick quote mortgage rates online tend to target the weaker scoring, low income, fixed income and minorities out there. There is a term for this. It’s called predatory lending.

What to watch out for?

Lenders will often contact you and try to rush you into making hasty decisions. Sell you a deal that may stretch you too thin with the promise of refinancing later when it may not be possible to do. Or they end up flipping you. Have repeated refinancing done that can actually suck the equity out of your home.

You could actually end up paying more than originally planned. Another thing they tend to do is leave out costs such as property taxes and insurance payments, doing this will make your payments seem lower. You do have to pay these costs regardless. So be sure to ask about this.

Mortgage rates online advertise the rates that a person with the best credit score and consumer profile might receive. Promising that everyone can get this kind of deal when in fact, they can’t. This is very much so, deceptive. So be smart and watch out for them.