Embarking on the journey to purchase a home can be daunting, especially when it comes to securing a mortgage. MTA Benefits spoke with representatives at New Fed Mortgage, who have more than three decades of experience helping consumers with their mortgage needs, to learn more about the process.
What are the top considerations in choosing a mortgage lender?
The most important factor in choosing a mortgage lender is to find one that takes the time to answer your questions patiently and honestly. The mortgage process is daunting to most people. An effective lender will ask questions and listen patiently to the client. Once the lender understands the goals and desires of the client, advising properly becomes a natural process. It is also very important that the lender offers competitive programs, rates and fees.
How important is my credit score?
Credit scores are the most important factor in determining a monthly payment, fees and rates. We cannot stress enough the importance of meeting with a loan representative early in the decision process of buying a home. The loan representative can help you prepare for the process. This advice can include suggestions on how to improve your score before you apply for a mortgage.
What are the different types of loans?
A myriad of loan programs is available to consumers, including fixed-rate and adjustable-rate mortgages, conventional loans offered through agencies like FHA, FNMA and FHLMC, as well as State Bond, rural housing, jumbo loans and non-qualifying loans.
How far in advance should I reach out to a mortgage lender before I’m planning to buy?
There is not a clearly defined answered to this. However, the sooner, the better. Understanding strategies and reasoning on how to prepare for the mortgage process can save a consumer thousands of dollars.
Are there strategies to use in buying a home now?
There are two opportunistic ways to approach the current market when choosing a mortgage option. Each of these options comes with some degree of risk.
Because rates go up and may eventually come down, a home buyer can elect to pay no closing fees to obtain a mortgage. This option is called a no point, no closing cost option. The goal is to initially accept a slightly higher rate and then to eventually refinance to a lower rate if the economy slows and rates drop.
The second option is to apply for an adjustable-rate mortgage. This product allows the borrower to take advantage of a discounted interest rate for a set period of time, usually from three to seven years. The goal when choosing this option is to refinance at a later date when the economy slows to a fixed-rate option.
New Fed representatives are always available to help you set a strategy that works best for your goals. Visit www.newfed.com/mta or call 877.861.MTAB to learn more.