For a first
time home buyer, applying online for a mortgage loan makes
the experience easy. You have plenty of time to compare rates
and terms to find the best financing for your situation. With
just a few steps, you can secure financing for your home with
the lowest possible rates.
1. Select Your Terms
Mortgage terms affect both your interest rate and payment.
With a large amount of flexibility, lenders allow you to tailor
your loan to fit your budget needs. So if your goal is to
purchase the most with your income, look into an adjustable
rate mortgage with initially low payments.
For security, fixed rates can also have reasonable rates.
For even lower rates, you can purchase reductions by paying
points at closing. One point equals one percent of the principle.
Paying points is affective if you keep your mortgage for at
least seven years in order to recoup the cost of buying the
rate reduction.
The length of the loan will also affect your rates and payments.
15 year mortgage provides you with a cheaper loan, but payments
are about a third higher than a 30 year mortgage.
2. Research Your Lender
Even a difference of an eighth of a point in rates can save
you thousands of dollars. The easiest way to save money on
your home’s purchase is by finding the lowest costing loan.
With online mortgage companies, in just a few minutes you
can request loan quotes without hurting your credit report.
Every time a potential creditor accesses your report, it temporarily
hurts your score.
Rates are one way to evaluate loans. But closing costs can
also add up to thousands. That’s why the APR number is important.
It gives you the total cost of the loan. But if you plan to
move or refinance, focus on low closing costs rather than
low rates.
3. Apply Online
When you have found the right lender, you can start your
home loan application online. Even if you haven’t found the
right house, you can still get pre-approved and lock in your
rates.
With online financing companies, your paperwork is expressed
mailed to you. You complete the forms with a notary’s seal.
Working with your real estate agent, escrow company, and seller,
the date of sale can then be finalized.
View our recommended Mortgage Brokers Online.
Carrie Reeder owns ABC Loan Guide, an online resource with
information about Mortgage Refinancing Online and Home Equity
Line of Credit lenders.
