When it comes to any big purchase like a TV or a car, of course, you’re going to shop around until you find the best deal. Some even enjoy the thrill of finding the best possible deal. Now imagine you’re buying a house and looking for a mortgage. Your home will likely be one of the largest investments that you will ever make, so why not shop around for the best deal on a mortgage too?
When it comes to purchasing something like a home in the realm of the hundreds and thousands of dollars many people will just take whatever the bank offers them and thank them for the privilege. Even a few points on an interest rate on a mortgage that lasts 20 years or more can make a massive difference to the amount that you are going to pay for your home. The importance of shopping around, or having a mortgage expert shop around for the best possible rate for you cannot be overstated.
1. Get the best possible rate
You should never be shy about asking as many questions as you can and ensuring that you have fully understood the terms of the mortgage. By shopping around you will be able to find a mortgage rate that will save you thousands of dollars.
2. You could be paying lower fees
After your mortgage expert has walked you through the interest rate and everything else that they promise you. You should ask about any fees that you will have to pay. You may be surprised to know that these fees can vary quite wildly and you should once again shop around to see not only where has the best rate, but also the mortgage provider with the lowest fees.
3. Avoid paying any penalties
If a deal seems too good to be true then it probably is. If you are planning on staying in your new home for many years to come, you may not be too concerned about any penalties if you decided to pay off the mortgage early or move house. Even though you have a plan in place, you should be ready for the many twists and turns that life throws at us. For this reason, it is always best to talk over any penalties that are mentioned in the agreement so that you are fully aware of them and can plan accordingly.
4. It’s not all about the rates
There is a temptation to focus only on the numbers, but when you are engaging with a financial institution that is going to be responsible for managing your home, you should also be making your choice based on trust and reputation. It is very important that you do not jump at what looks like the best deal if you have not done your due diligence on the financial institution. This does not mean that you should be overly wary, just check in on what others have to say and see if there are any really negative reviews about customer experience. This will alert you to any red flags and then you can make an informed decision.
5. You might need a specific lender
Not all lenders will be the right fit for you. Based on your credit history you may find that you need a specialist lender that is willing to take you on as a customer. This can be a little frustrating, the best way to find the right lender for you is to speak with a mortgage expert that can shop around for you and get you the best deal based on your unique circumstances.