Preparation and research are essential while shopping for a mortgage, especially if you aim to save some money in the process. Whether you are shopping for a home refinance deal, home equity loan, or home purchase deal, shopping around for a mortgage in Dallas, Texas can help you to get a good mortgage deal. Of course, this generally entails speaking to as many mortgage lenders as you can with the aim of comparing costs and ultimately negotiating for the best deal. Here are five tips for buying a good mortgage in Dallas, Texas:
Search for a home you can afford in order to obtain the best mortgage deals from lenders. What's more, perform home affordability calculations to assess your capacity for making timely repayments on the loan. Your ability to make mortgage repayments depends on the market value of the property against your personal income and expenses. A good home agent can help you secure a good mortgage in Dallas, Texas.
Knowing your home acquisition rights and responsibilities can help you to secure a good deal with most lenders. The Equal Credit Opportunity Act prohibits lenders from denying you home loans based on nationality, age, marital status, sex, religion, or other personal aspects. The Fair Housing Act on the other hand prohibits all forms of discrimination in real estate deals. The two laws prevent lenders from denying you a mortgage, or overcharging you for home loans based on personal characteristics.
In Dallas, TX, mortgages are generally available from different financial institutions including commercial banks, mortgage companies, credit unions, and savings banks. These lenders usually quote varying lending rates to potential clients, so you should speak to as many lenders as possible with the aim of finding the best deal. Additionally, you should take full advantage of special offers/promotions. For instance, a lender may introduce a new home loan product, or lower its base mortgage rate to attract customers. Such deals can help you lower your mortgage costs significantly.
Besides mortgage lenders, you should also speak to different mortgage brokers about your particular mortgage needs. This is because such brokers tend to have access to multiple lenders and can provide you with useful information about lenders terms and conditions. However, you are responsible for making the final decision regarding the mortgage provider. If possible, choose a local mortgage brokerage firm and ask about their costs, terms, and conditions.
Information is indispensable when you are looking for a good mortgage deal. Besides the down payment and the associated interest rates, you should also be familiar with the following numbers:
In general, the lender should quote the prevailing interest rates. Property Interest rates are either fixed or adjustable. Monthly mortgage repayments for fixed interest rates remain the same throughout the repayment period while repayments for adjustable rates vary depending on market forces. Moreover, you should inquire about the annual percentage rate (APR) for the loan. This percentage value includes points, broker fees, credit charges, and other mortgage costs expressed as an annual rate.
Lenders usually link these extra mortgage fees to interest rates. In other words, your loan interest rate will decrease in proportion to the number of points you buy. To get an idea of the actual payment, always ask the lender to quote points in term of dollars.
Typical mortgages come with a number of associated fees including loan origination, underwriting, broker fees, transaction fees, settlement fees, and closing costs. Fortunately, these fees are largely negotiable and additionally, you may finance them through short-term loans though this will increase your overall liability.
Mainstream mortgage lenders require approved borrowers to deposit at least 20% of a property's market value up front. However, you can get lower down payment requirements from "thrift institutions" such as savings banks and credit unions. These institutions will require you to obtain private mortgage insurance (PMI) as protection in case of mortgage default. Government and state sponsored housing programs such as the Federal Housing Administration (FHA), Veterans Administration (VA) and Rural Development Services have substantially lower deposit requirements for prospective homebuyers.
Once you are aware of what each lender has to offer, negotiate for the best possible deal. Lenders and brokers usually quote different mortgage costs to different customers. This is because home loan officers and brokers earn a commission (overage) from mortgage deals that go through successfully. This commission is the price difference between the lowest quoted loan product and the highest price that the consumer agrees to pay. Financial institutions normally fix overages in the form of points, fees, or interest rates that are part of the entire mortgage product.
Since the quoted mortgage price for homes is likely to comprise overages, request for a breakdown of all costs associated with a mortgage product. Then, ask your potential mortgage lender to lower or waive one or more of the fees or points included in the deal. Of course, the lender should not reduce mortgage fees and raise points or vice-versa. Equally important, ask for a review of the loan's terms and conditions. Lenders can reduce some costs associated with the mortgage based on your negotiating power since there is high competition for customers.
Once you come to an agreement with a mortgage lender or broker, you should lock-in the deal immediately. This entails signing a written agreement guaranteeing a specific interest rate on the mortgage if you close the deal within a specified time. The lock-in may also specify the number of points payable during final closing as well as other terms and conditions of the mortgage.
In summary, searching for a good mortgage in Dallas, Texas may prove to be a challenge for some people. This is because, to get such a mortgage, you would have to do a lot of research, speak to many people, and shop around for the best possible deals. Moreover, you would likely have to negotiate with brokers or lenders, especially if you are looking for home refinance options.
In order to calculate loan payment, with compounding interest, you use the formula:
M = P[i(1+i)^n]/[(1+i)^n -1]
M is the payment amount, P is the principle, i is the interest rate and n is the number of payments required for loan pay off
Securing a mortgage for your new home doesn't have to be a difficult process. There's a few basic steps you need to take in order to prevent disaster when it comes to financing your home.
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