*** begin quote ***
My first mortgage?
This is my first time getting a mortgage. I have no clue what to even look for. I know that I need to shop around and get quotes… But I HAVE NO IDEA WHAT TO LOOK FOR! If anyone else out there has shooped around, can you please let me know exactly what I need to know about getting a mortgage before I call a bunch of places and sound like an idiot…and then they might take advantage of me. Please help.
*** end quote ***
First take a deep breath. Then, marshal your resources. Do you have a relative that is financially sophisticated? Use them as your sounding board.
If you haven’t signed for the property yet, or maybe even if you have, find and retain a Real Estate attorney that you can afford. It’s a GIANT mistake to get into a real estate deal without a liar … err, I mean lawyer. Don’t use the seller’s. Don’t use the mortgage company’s. Have your own. When I bought my first house in 1975, that single piece of advice from my Mom saved me about 15k$. My lawyer said “my client isn’t responsible for that” about a dozen times. Without him, I’d have said “yeah whatever”.
Then you need an accountant. Same deal. Cheaper and easier. Have them review whatever you are going to sign up for. Promise you’ll let them do your taxes and I bet they’ll come dirt cheap. Shop around. I SHOULD have done that with my second house and I’d have saved a bunch of bucks.
Then you need a “home inspector”. Licensed, certified, insured, with lots of references. This is no guarantee of being problem free, BUT, when you’re in front of Judge Judy you can saw “I didn’t know about houses so I hired him! Pointing accusingly to the defendant.) It’s all about changing unknown risks into modest upfront costs.
Find or found, the house of your dreams.
Now you are ready to consider mortgages.
You can get them from a bank, brokerage, mortgage broker, credit union, and private lenders. Start with a credit union. (IMHO you’ll we get the most honest deal there.) Find a rich relative with a brokerage account and as if they can get you a deal. (I have a Merrill account and my relative could have gotten a mortgage with them with my “sponsorship” — not cosigning — at an attractive rate. Dumb, but they wanted to do it on their own. I think they made a mistake. But not my problem.)!
Look at the type (Suggest you want fixed), term (15 if you can afford it), points (extra interest cost), fees (Yuck!), and gimmicks (i.e., credit life insurance; buyer protection).
Your lawyer, accountant, and home inspector can tell you if you are getting a “fair deal”. No balloons, teaser aprs, negative amortizations, interest onlys, nothing tricky.
Your family member, or Yahoo answerer, can tell you if you can afford it. No more than 20% of your salary in mortgage payments. OK 25%, but that means no eating out.
Hope this helps, and you’re happy with your new mortgage, let me know how it turns out,
fjohn
# # # # #
Reinke Faces Life 
A team of experts on your side is ALWAYS a good move. However, a mortgage pre-qualification, or even better yet a pre-approval, should be one of the 1st steps that a new buyer needs to take. With a pre-qualification or pre-approval letter in hand, an offer for purchase will be much stronger when negotiating.
First, get a GOOD real estate agent! No, all real estate agents are NOT created equally. I know, I am an agent and have seen other agent performances that make me shiver in shame. Look for an agent that can show you an on-going strong history of continuing education classes and past client testimonials.
Second, avoid wheel-spinning by taking a moment to figure out how much mortgage you CAN afford. Generally, a lender will want your monthly mortgage payment to total no more than 29% of your monthly gross income (income before taxes and paycheck deductions). You may not want up to 29%, but by knowing a number early will keep you inline with YOUR budget. Just because you may qualify for a $500,000 home doesn’t mean that you should buy one!
Third, consider current loan interest rates. The lower the interest rate, the more expensive the home you’ll be able to afford.
Finally, negotiate with the lender. Lender’s origination fees and processing fees are always negotiable. Everyone likes to get paid, but I have seen origination fees charges that were out of this world. If the lender is not willing to come down on their fees go elsewhere.
Dana DeLuca
http://columbushomedreams.com
LikeLike