As a Buyer When Should I Buy a Mortgage Rate? (Podcast)

When and how to buy a mortgage interest rate

A common piece of advice for homebuyers is “compare lenders” or “look up your own rates.” This is great advice, but it certainly misses two important details. And how do you do that?

Mortgage expert Ivan Simental tackled these questions in a recent episode. The Mortgage Reports PodcastHere’s what he had to say and how to do rate shopping right.

Listen to Ivan on The Mortgage Reports Podcast!

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When to buy a mortgage interest rate

There is no rigid “right” time. Look around and compare lendersHowever, if you want the smoothest home-buying experience, it’s a good idea to take this step early — before you start buying a home. That way, when the house you need is found, the financing will be prepared and ready to go.

“We do that first so that when we’re in the deal, we don’t talk to other lenders or try to get other rates during the deal,” he says. “Remember, time is of the essence when you’re under contract. You need to make sure things are done in a timely manner.”

How to choose a lender get pre-approved Before looking for a home, don’t just find a low interest rate. It can also facilitate the closing of sales.

Some lenders offer ‘verified’ or ‘fully underwritten’ pre-approval. This allows most of the application process to be completed early, so once the deal is finalized, the loan can be completed sooner. This makes the offer more attractive to sellers and gives you an edge over the competition. You can ask your lender about this option when getting a quote and comparing rates.

Shopping when you’re under the pressure of a sales contract can feel rushed and can even put you Deposit Are you in danger or, worse, your dream home is in jeopardy?

“If you’re shopping for a price and this takes a week, you’ve lost five days on the purchase contract,” says Simental. “This could make me lose my deposit. This could make me lose the deal. This could make me never buy this house.”

How to buy a home loan interest rate

Shopping for Mortgage Rates can be quick and painlessAll you need to do is get Pre-certified or pre-approved by several different lendersMost experts recommend comparing at least three estimates.

To get a rate quote, you’ll need to complete a simple application that most lenders offer online. For pre-approval, the most accurate estimate of rates and homebuying budgets, the lender will request several supporting documents such as a payslip or her W-2. Be prepared to show:

  • valid identification
  • Income certificate (tax return, pay slip)
  • Proof of assets (bank statement, investment account statement)

If you’re just looking for a quick quote to compare, you can get prequalified rather than preapproved. The prequalification process is quick as no paperwork is required to be submitted. However, please note that the interest rates and loan amounts shown may not be accurate.

One last thing: Don’t worry about multiple pre-approvals hurting your credit scoreEach lender conducts a credit check. But as long as he gets quotes from each other within two weeks, the credit bureaus consider them all a single application.

Tips for comparing loan offers

Choose and compare at least three lenders when you start buying a mortgage. As Simental says, “Compare apples to apples.” Get a quote for the same type of loan program and make sure it includes what Simental calls a “par rate” (i.e. discount points ).

“This is very important because we often compare one rate with another, one offering discount points and the other not,” says Simental. “So obviously one will be much higher than the other.”

You should also consider which loan officer you are talking to and how competent they feel. Did they ask about your budget or long-term goals?

“If they don’t ask you all these questions, I don’t think this loan officer is for you,” says Simental. “They need to know your particular situation. They need to know what you’re going to do with this house. If they’re not splitting it up and giving you multiple options.” recommend that you find another one.

next step

If you have any other questions about the rate shopping process, please contact your mortgage lender, loan officer, or mortgage broker. They can give you guidance based on your particular situation.

Information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the authors and do not reflect the policies or positions of Full Beaker, its officers, parent company or affiliates.

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