When a home is purchased, most look at the home as the only product they are purchasing. Unless you are paying cash for a home, there is a often overlooked product, the home loan. When you obtain a home loan, you give your lender a mortgage, which is security to your lender in case the loan is defaulted. In Oregon, you enter into a trust deed with your lender and a neutral third party, usually a title company (read more here). Bottom line, when obtaining a home loan you are buying a product, and when you buy a product you want to receive the highest quality, and value in that product, right?
When you decide to purchase a home, and in turn make an offer, that is a excellent time to begin diligently searching for the best loan product for you specifically and whom to obtain it from. Lenders, Credit Unions, Banks, Mortgage Brokers are all different entities that provide loans towards the eventual purchase and ownership of a home. You will want to establish which one you are speaking to when obtaining a home loan. Different fees and loan structures are often represented by each of the different loan parties.
Identifying the diffrent loan fees and what percentage of down payment will be required is another important thing to keep in mind when shopping for your home loan. Now days a lot of loan institutions are requiring 20% of the purchase price of the home as a down payment. However, there are numerous loan entities and products that do not require that steep of a down payment. Keep in mind that because a large down payment is viewed as security to a lending institution they will want to secure there loan in another fashion. Typically that security comes in the form Private Mortgage Insurance or PMI. When dealing with lenders, understand how PMI and the percent of down payment will affect the total loan product.
After you have spoken with diffrent lending institutions about terms, fess etc… and have narrowed down your search, you will want to actually begin negotiating with that institution trying to accheive the very best deal possible. Remember business is business and you can save yourself thousands of dollars by being willing to negotiate further. Also keep in mind that any good negotiater is willing to walk away from the deal at any moment.
Good credit and bad credit, still negotiate, it can only help and you would be surprised the degree of diffrence that exists between diffrent loaning institutions. Don’t sell yourself short and obtain the very best home loan possible.
A information and guidance page is provided by federalreserve.gov regarding the home loan process and in my opinion is a must read for any first time home buyer, or home buyer whom hasnt purchased a home loan in some time. The informational page can be found by clicking here, it includes a brief on the home loan process, a glossary of commonly used terms, as well as a comparrison worksheet to take with you when shopping for your home loan.
If you have any questions or comments please feel free to leave them here on this blog, or email me directly at firstname.lastname@example.org. I’m a licensed real estate broker in the state of Oregon and work for Prudential Northwest Properties-Sunriver Branch. It is my objective, to be a honest and accurate resource of real estate information, who can guide you though your real estate sale or purchase.