Now is an excellent time to buy real estate. With plenty of inventory and low interest rates, finding your dream home is a cinch. Before you start searching, it’s important to speak with a loan officer regarding a mortgage. There are many different options that you can choose from when it comes to a mortgage. While these professionals who specialize in mortgage lending in Vermilion County, Illinois, possess a wealth of knowledge regarding the real estate market and loans, there are a few things they may not tell you.
- ·You don’t need a high credit score to qualify for a loan. If you’re under the impression that you need a 720 credit score or higher to score the home of your dreams, think again. Many mortgage lenders require a minimum score of 680 to secure a loan. If you are applying for an FHA mortgage loan, you may even qualify with a score of 620.
- ·Fees and rates vary between lenders. Don’t be afraid to shop around a little bit before deciding on a mortgage lender. Typically, each lender charges different origination fees and closing costs. While it may only be 5% of the purchase price of your home, that’s a big chunk of change. Search for the best deal to save yourself as much money as possible.
- ·Closing at the end of the month is always better. If you choose to set your closing date at the beginning of the month, you’ll end up paying more “prepaid interest,” which is due at closing. Set your closing date as close to the end of the month as you can to avoid paying extra upon settling.
- ·Longer term mortgages cost more. If you talk to any mortgage lender, they’ll try to push you towards a 30-year loan. You may think that this is because it’s more affordable for you. While it will cost you less on a month-to-month basis, you’ll end up paying quite a bit more in interest. If you can swing the extra money, shoot for a 15- or 20-year mortgage instead.
- ·There are ways to take a break from your mortgage payments. When times get tough and you are struggling to make your mortgage payment, you do have options beyond foreclosure and short sales. Most lenders offer skip-a-payment or forbearance options for those who qualify. Depending on the severity of your situation, you may even be eligible to have your payments suspended for a few months.
- ·Don’t fall for gimmicks. Even if a lender advertises a no-cost closing, there’s usually a catch. Depending on the circumstances, the lender may roll the closing costs into the loan. This means that you’re actually paying more for the closing costs over the life of the loan due to interest. If it’s not rolled into your loan, they may charge a higher interest rate—which would also cost you more over time.
Before you start house hunting, it’s important to get all of your financial ducks in a row. Shop around to find the right mortgage lender in your area to handle your loan. By understanding the ins and outs of the lending world, you are better prepared to search for the right mortgage lender in Vermilion County, Illinois.