Your mortgage will be a huge determining factor in the state of your future finances, so you want to make sure you get a good deal. It can be difficult to know where to start when you are buying your first home, but these tips are good for even those who have already bought a home.
Know Your Stuff
It’s easy to get taken advantage of if you don’t know the facts. Before you even start looking for a home or considering who to get a mortgage with, make sure you do your research. The first things you should do is look into the current housing market. Is it a buyer’s market or a seller’s market? What is the average interest rate on a home? After you know what is going on, you should look into your personal situation. Your knowledge of the housing market and your knowledge of your personal finances will allow you to make an educated guess about what you can afford when it comes to buying a home. Use a mortgage calculator to calculate potential payments. Run a few different scenarios so you know the boundaries that you can negotiate within.
Listen and Compromise
Negotiation means that things might not end up exactly the way that you want it. Your lender has certain parameters that they have to work within, so you have to be willing to work within them as well. This is where your research comes in handy. If you know what your limits are and what the company limits are, you can sit down with the lender and find something that works for both of you.
Be Willing to Walk Away
At the end of the day, just because you started negotiations with one mortgage company, doesn’t mean that you have to follow through and sign a contract with them. If you simply can’t come to a compromise, then you can walk away and find another company. Make sure you don’t come across as desperate because you shouldn’t be. Additionally, if your lender is unwilling to negotiate, sometimes letting them know that you are willing to take your business elsewhere will make them soften up. They would rather get less than they want than miss out on your business entirely.
Read the Fine Print
Once you sign a mortgage contract, that is final and legal binding. Unless there are clauses that are not legally enforceable, you are bound by everything in that contract, whether you read it or not. So, before you sign the contract, make sure you read everything. No clause or section is unimportant. If you don’t understand something, make sure you take it to a real estate lawyer so you don’t get duped.
Negotiating a mortgage may seem complicated, and in some ways, it is. But it doesn’t have to be an experience where you walk away worse than you were before. Don’t be afraid to negotiate, and don’t be afraid to ask for help with your negotiations.