David H. Stevens
President and CEO, Mortgage Bankers Association
Achieving the American dream of homeownership is a major milestone in life. But the process can seem daunting. Before you start house hunting, you will need to shop around for a mortgage. There are a variety of options, and your lender can help sort out which kind of financing is best for you. Here are a few things to keep in mind.
1. Know your budget
Remember that your monthly payment will include not only principle and interest but also insurance and taxes. Also, don’t forget that in addition to a down payment, most people will have closing costs that can be significant.
2. Understand the process
Talk to people you know who have recently purchased a home and ask about their experience. Talk to your lender about the process and timeline, so you’re prepared when it’s time to make an offer on a home. Ask lenders what to expect after you make an offer on a home.
3. Talk to more than one lender
Get recommendations from friends and your real estate agent. Explore the different mortgage products they offer — especially those for first-time homebuyers, like Federal Housing Administration loans and other types of loans with lower down payments. Choose a lender that’s responsive and helpful.
4. Help your lender work for you
Once you make an offer on a home, you’re working with a deadline: the closing, or settlement date. There will be a lot of forms and documentation needed beforehand. Make sure your lender guides you through the process so you stay on track. Much of the process leading to closing can be done online or even on your smartphone. A good lender will do its best to make sure that everything goes smoothly.
If you understand the process before you start house hunting, you’ll be moving into your new home before you know it.
David H. Stevens, President and CEO, Mortgage Bankers Association, [email protected]