My Experience With Mortgages

Our loan to purchase our first house was approved on Friday.  Hurray!  So, now that everything is almost squared away, I thought I’d write a post about what I’ve learned during this process.

1. Shop around before you commit.  I compared about 10 lenders/brokers.  That’s probably on the high side, but I learned so much from the process and felt completely confident when we did select our lender.  Make sure you ask about ALL the fees they anticipate so you’re comparing apples to apples.  BUT, price isn’t everything.  In the long run, saving a few hundred in fees now isn’t going to be that important if you end up with a sketchy lender and end up not closing on time or even worse, having to switch lenders.

2.If you like data, download an amortization table for each of the fixed terms you’re considering (there are rare instances in which I think an ARM mortgage would be a good idea, but it definitely wasn’t for us).  This way, you can truly know what the difference is in a 15 year or a 20/30 year and calculate whether or not it’s worth it to you to pay for points.

3. There are real benefits to using a local broker/lender, but there are some trustworthy brokers and lenders that aren’t local.  Just make sure you check BBB and reviews of the brokers and lenders you’re considering using.  Don’t let anyone bully you.  If anyone you’re talking to makes you feel like you are asking too many questions or not committing to them quickly enough, walk.  It’s not worth it.  There is also an intangible element that shouldn’t be underestimated.  This is a relationship.  It IS important that you like and trust your lender.  Even if you have no reason not to trust a lender, if you don’t, find a different one.  The process gets frustrating and emotional at times and you need someone you trust to guide you through, especially if you’re doing this for the first time.  I ruled out one broker because he kept leaving my name off fee estimates and only putting my partner’s name on them even though I was the one one the broker was talking to.  Even if the broker wasn’t a raging chauvinist and he might have gotten us a competitive interest rate, it irritated me that he kept leaving my name off and I didn’t want to support him.  Irrational?  Probably, but there really is an emotional component to this process and now we have a lender who is wonderful that I trust and doesn’t make me feel taken for granted.

4. Gather all your documents.  I mean ALL of them.  It will make applying for a loan much easier for you and your broker/lender.  I compiled all of our documents in a pdf so it was easy to email.  It feels uncomfortable sharing so much personal information, but there’s no way around it, especially post-mortgage crisis.  Banks want to know EVERYTHING.

5. Communicate with your lender.  You’ll probably have to write some letters of explanation about something, but stay on top of it.  Getting a mortgage is a little like running a marathon.  You will get tired, you will want to just give up or put more faith in your lender than you should, but stick with it!  Your diligence will pay off and at closing, there will be no surprises.

Good luck!

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