All mortgage owners will tell you that now’s the best time to apply for a mortgage, and they’re right. Interest rates are historically low, and buying a home has never been easier. But while all reliable lenders will eagerly answer any questions that you may have, few will reveal these three guarded secrets about mortgages.
Loan rates and fees vary from lender to lender.
When you apply for a mortgage, expect to pay a loan origination fee. The majority of banks charge anywhere between 1% and 2% of the total loan amount. Upon closing the mortgage, expect to pay fees ranging from 3% to 6% of the sale price. Interest rates similarly differ from one bank to another. It doesn’t hurt to shop around for the lowest mortgage rates in Utah before signing any papers.
You are not doomed if you do not have a great credit score.
Years ago, you’d almost get a mortgage if your heart were beating. Things have significantly changed since. Today, you’ve probably heard repeatedly that you need a stellar credit score to stand the chance of being preapproved for a mortgage. In reality, there are loan facilities for people with less than perfect credit scores. A great example is the FHA mortgage.
Shorter mortgages are cheapest.
Many mortgage lenders will encourage you to take the 30-year mortgage because it is more affordable to repay. Well, that’s what it may seem because of the lower monthly payment. But the truth is that you are actually paying more in interest by taking a long mortgage. When you can afford it, it’s best to take the shortest mortgage.
Without mortgages, most people would never experience the accomplishment of owning homes. By knowing some important things about mortgages, you can get to make the right decisions as you apply for one, so you get a great deal for yourself.