Today, a majority of Americans are homeowners. But that doesn’t mean they know much about home ownership. Many people are put off by the idea of buying a house – and buying a mortgage-free home – because it can be scary. As such, many people don’t understand how essential it is to get the best deal on their mortgage. It can sometimes be hard to understand exactly why you should or shouldn’t get into a home loan. It’s almost like there is good and bad mortgage advice out there – and some of it can be very expensive and misleading. Here are 5 tips on how to save on your mortgage that you may not have thought about:
Don’t offer too many concessions.
Some of the most important aspects of a home purchase are the price of the home and the terms and conditions of the mortgage. You don’t want to oversell your mortgage by offering too many incentives at the same time. If you have an extra $100,000 to spend on a home, you might want to consider offering a $100,000 cash gift to your buyers. But if you are offering $500,000 in incentives, you might want to look into your Concession Policy.
Keep your rates low.
As a homebuyer, you may be interested in some of the best rates available on home mortgages. But how do you know which banks are offering the best rates and how do you compare those rates against other homebuyers? It’s a good idea to shop around and compare interest rates from different banks. There are websites that will do this for you. Look for a website that will show you the interest rate currently available on different bank accounts. Then, use that data to calculate how much you can save on a home mortgage.
Get an interest rate reducer.
If you are getting a low rate on your mortgage and you know you will be paying more on other expenses, like property taxes, then it is worth looking into getting an interest rate reducer. You may be able to get a lower rate on a fixed-rate mortgage or a longer-term loan. Consider talking to a mortgage banker or a mortgage loan officer if you are unsure where to start.
Look at your mortgage term and know when is the right time to find a refinancing deal.
If you are interested in refinancing your mortgage, but you are not quite ready to pull the trigger on a new loan, it is worth looking into when is the right time to refinance. The best time to refinance is usually when interest rates are at their lowest. In this case, refinancing can save you a small amount of money upfront, but will cost you less in the long run.
Get preapproved for the lowest rate possible.
Once you have found a lender that is willing to work with you, it is worth getting preapproved for the lowest possible interest rate on a home mortgage. This way, you will know exactly what interest rate you could be paying on new mortgage debt if you choose to refinance and make the switch.
Don’t forget to shop around!
While it is helpful to look into the rates from different lenders, it is also a good idea to shop around and compare interest rates from different lenders. You don’t have to use every available bank account or credit union option to get a sense for what other homebuyers are getting into their loan programs. You may find that you qualify for a better interest rate at another bank, even though you are getting a higher rate on your current savings account. This is a good indicator that you are missing out on a better deal somewhere and should shop around again.
Final tip: Get a loan advisor who knows the mortgage industry and can answer all of your questions!
When you are looking at different types of loans, like a home mortgage or a vehicle loan, it is always a good idea to get help with the jargon and technical terms. Keep your loan advisor’s phone number in your wallet so you can quickly get a hold of you if you need help with a question about a loan. And, don’t be shy about asking your loan advisor for help with your mortgage. You won’t be sorry for doing so.