After various months of lockdowns and social restrictions measures, the summertime seasons seems to be a great relief for those who are looking forward to spending some time outdoors. However, this novel COVID-19 virus has reshaped all aspects of the economy, affecting especially negatively to the housing sector. Both borrowers and lenders are trying to find out new ways to survive to this “tsunami”, in an attempt to go back to normal.
Now that lockdowns are being eased all around the globe, physical visits and meetings between the interested parties are being resumed. Therefore, it is key for all those that are interested in buying a new property, to keep an extra eye on the process of choosing the perfect mortgage lender. Pandemic aside, this aspect of the process should always be carefully regarded.
1. Check your credit score.
In order to apply for a new loan, you always need to meet certain criteria.
Therefore, checking on the overall health of your credit score is vital every time that you wish to apply for new credit. Everyone is entitled to a free credit score report each year, it is best to apply for it at the beginning of the mortgage application process. This way, you will make sure that your rating looks perfect to take on the next steps. Low credit scores are risky, as lenders and banks won’t trust your ability to face your payments.
2. Find out what type of mortgage lender fits your needs
Nowadays, you have more options than ever before when applying for mortgage credits. However, you will need to pay attention to the fine print, as a wide range of institutions has modified their mortgage applications requirements and terms.
- Online mortgage lenders. Online mortgage lenders offer a wide range of different options, especially for those potential borrowers with a poor credit score, such as guarantor loans. Now that physical contact has been reduced to a maximum extent, online borrowing options are the perfect choice for many people.
- Large firms. Singing up with a big multinational always takes more time and need more requirements. On the other hand, they also offer some flexibility and standard interest rates.
- Local banks. Local banks are known for offering a more personalised and customised attention to their potential borrowers. If you are looking for a more accessible experience, this option is for you.
3. Define your budget
Having a clear picture in mind of what you can afford to pay will save you from future risks and disappointments. Set up a fixed budget with the money you can afford to pay when the mortgage application gets approved. If you do not do this, you could risk losing your new home.
4. Avoid extremely good offers
We are currently living extraordinary times, and the housing sector is becoming more and more complex, with lower prices and more requirements to meet. Therefore, massive bargains will be difficult to spot, meaning this a sign of a scam.
5. Compare rates from mortgage lenders
Saving on rates is a matter today. Ask for different quotes to lenders and compare between them, as they may vary. Make the most of your research skills and negotiate the best interest rates for your mortgage agreement. This will make a difference in your monthly savings, so pick up the lender with the lowest interest rate.
6. Look for mortgage consultants that do not get paid on commissions
Source for professionals that will provide you with the right information while taking care of you and your needs. Avoid money-motivated people, as they would only be thinking of making their own money each month.
7. Find a lender with tons of experience
These are not good times to make experimentations, as uncertainty is now part of our lives. This is why you should choose those mortgage lenders that have more experience in the field, as you know that you are on the safe side.
8. Spot a lender that has various mortgage programs
Because you need to compare and contrast all different options, it is best to go for a lender that offers a wide range of packages and programs to choose from. Find out the best option for you and do not forget to do your research before every meeting.
9. Get pre-approved for your mortgage
Getting pre-approved will allow you to find out how much you can afford to pay and under which conditions this applies. It will also show your lender your ability to face payments and to meet the specific criteria.
10. Ask the right questions
Be educated and do the pertinent research before asking the lender those questions that you need. The process of closing a mortgage agreement is long and, as you are sharing a lot of personal information, you also have the right to ask everything that you need.