The following information is the second in a series of Buyer Tips to provide tips for both the first-time homebuyer and the most experienced homebuyer. The goal is to help the consumer to become better educated about purchasing real estate in Colorado Springs and the surrounding area.
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Tips #2 - 6
2. Consult a mortgage lender prior to looking at homes. Lending requirements seem to be changing daily, so make sure and know your mortgage options and what you qualify for. Don't wait until you find a home to get pre-qualified.
As a Colorado Springs Realtor, this is probably one of the biggest mistakes I consistently see made by all home buyers. It's important to know in advance what you are qualified for. If you qualify for $150,000; don't look at houses that are worth $250,000; you'll just get discouraged and disillusioned. It's similar to looking at a Lexus SUV, when you can really only afford a Nissan SUV.
3. Shop around when it comes to mortgage lenders, as rates and closing costs can vary vastly between lenders. The "Best Rate" isn't always the "Best Loan". (Almost daily you can pick up a local newspaper and read about all of the people who got adjustable rate loans and didn't understand what they were signing for.)
4. One of the best ways to judge Lenders is to compare the rate offered to the costs listed on the Good Faith Estimate (GFE). Don't be afraid to ask questions about the Good Faith Estimate. In some ways the loan is just as important as the house you buy; both are long-term decisions that have a huge financial impact.
5. Remember: Lenders are in business to protect and promote their own interests, above your own interests. They receive their commission by taking the rate offered by an Investor, then quoting a rate to the borrower based on what they wish to make on the transaction.
6. FINAL REMINDER: Be sure you know what your loan will cost you each month and discuss closing costs in detail. Don't be afraid to ask questions and shop for a loan.
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The original article was posted at: Shop for a Lender like you shop for a house
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