Interest rates have made headlines all through 2020 and 2021. These historically low interest rates have caused many families to consider buying their first home. Making this decision will help benefit your future long term, but it’s important to remember that there are more factors than the interest rate when shopping for your home. Here are five things just as important as rate when shopping for your home.
Your monthly Payment is an incredibly important factor in picking the right lender and loan product. While you may be able to qualify for a certain amount with a great interest rate, if you are struggling to make your mortgage payment every month, it is not worth having a low-interest rate.
The Right Loan Product
Picking the right loan product is just as important as securing a lower interest rate. Your loan product will help determine:
- Your loan term
- How often/if your interest rate adjusts
- If you pay monthly mortgage insurance
- How much you need to put down
Your loan officer will look at your current situation and see what specific loan product makes sense for you and your family.
A Smooth & Timely Process
We built Summit on the concept of delivering industry-leading customer service. During the loan process, there are so many chances for it to go sideways. When you shop based on the cheapest interest rate, you are also going to get the bottom of the barrel when it comes to service.
Using an inexperienced lender could cost you both your home and hard-earned money.
The Cost Of The Loan
A common tactic in the mortgage industry is to display lower and enticing interest rates while disclosing it tiny at the bottom of the marketing collateral. While this is legal, at Summit, we are highly against it and label it as immoral. Consumers deserve to know exactly how they are paying for their mortgage.
If you are being offered a lower interest rate than most, make sure to ask if you are paying points to discount your interest rate. This will help you determine exactly how much you are paying to have your loan and compare apples to apples.
Your Future Mortgage Plan
Depending on how long you will be staying in the home and your future financial plans, you will want to make decisions differently. It is the responsibility of your loan officer to take these plans into consideration and build a mortgage strategy that takes care of your family long term.
If you are going to be refinancing soon, the interest rate may not be as important right now. Make sure you use a loan officer that works by referral only. They will be much more likely to worry about your financial future and want to be your lender for life.
Curious about the home loan process and want to get started? Click here and speak with one of our experienced loan officers. They will help you determine what you need to get started, all while educating you along the way.