How To Save Thousands On Your Next Home Purchase

Want to save Thousands on your next home purchase?

With Mortgage rates at or near all-time lows, the timing couldn’t better for getting a mortgage. As a result of the economic crisis, the Federal Reserve has slashed the fed funds rate and is  purchasing long-term treasury and mortgage securities in an effort to restart the housing market. What does this mean for you? Low Mortgage Interest Rates!

There are a few key things to consider that can save you thousands of dollars on your next home purchase:

Know Your Credit Score

Three major credit bureaus — Experian, TransUnion, and Equifax — collect the information that your credit history is created from. This information is used to formulate your credit score. The most widely used credit score is called the FICO, based on a model devised by Fair Isaac Corp., which assesses your risk to lenders on a scale of 300 to 850.

The higher the score, the lower your mortgage rate.

Find The Right Lender

Get at least 2 quotes (3 is even better) from different mortgage brokers or banks. The options and loan programs can be different from each bank or mortgage company. Always ask for a Good Faith Estimate (GFE) from each one. The GFE will describe the interest rate and terms, plus all the fees that will be charged, giving you a good way to compare loans.

Ask your Lender for information on any special loan programs for your city or state. This is a wonderful way for buyers to get a low cost, low down payment loan or no money down. There are often first time home buyer programs, step up or rural development programs that can save you $$

Stay away from points

Paying points can get you a lower interest rate. But in today’s Huntsville area housing market, interest rates are already low.

Beware of Junk Fees

Most everyone has heard about junk fees charged by the lender. Did you know that real estate companies have been adding fees, too?

Ask your Realtor if his company charges a Transaction Fee or Document Storage Fee — usually $175 to $500 — when you buy a property. It’s just another junk fee.

Beware of the “deal” offered by new homebuilders

New homebuilders often offer to pay your closing costs if you use their preferred lender. However, they may be adding their own closing costs to yours and the interest rate could be higher than what you would find on the open market. Always check with other lenders before making a commitment.

Last but not Least…

Hire the right REALTOR®. a knowledgeable professional will know the right steps and have the most up to date resources available to make sure you are on the right path to getting the best price and are aware of the steps to saving THOUSANDS on your next home.

Sources:

http://www.consumerfinancereport.com

http://money.cnn.com/

http://www.kcmblog.com/