The purchase of your home is one of the most important transactions in your life, and you’ll surely want to make it with the best business partner.
Just as there are lots of fish in the ocean, there’s a whole range of mortgage institutions and products. Don’t be intimidated by them. Find some tips for selecting the mortgage bank that’s right for you.
You should know your credit score. This is one of the factors that banks use to determine the interest you’ll be eligible for. If you have a low score, you’ll need time to fix your finances and improve your credit. (For advice on how to do this, click here.)
Then, estimate how much you can borrow. The monthly payment for your new home shouldn’t be more than 28% of your income. A mortgage advisor can help you determine how much you can borrow by pre-qualifying you.
You should also start getting together the documents that you’ll be asked to submit. Click here for more details.
Do you know the difference between “interest rate” and “APR”?
Your loan’s interest rate is the percentage you’ll pay each year on the principal that you borrow.
The APR, or “annual percentage rate,” is a percentage that includes both the interest rate on the money you borrow and the finance charge of your loan.
Once you have this information, compare interest rates and APRs. But you should understand that the selection of a mortgage bank entails much more than finding a good interest rate and APR.
Over and above the APR
When choosing your mortgage institution, remember that this will be a long-term relationship, since getting a mortgage takes time, from applying for the loan to closing. But even more important is the interaction you’ll have with the bank over the next 15 to 30 years. Think about the bank’s customer service, and how easy it will be to make your payments and get answers to your questions.
On the other hand, if you’re planning to refinance, it’s important for you to realize that you can do that at any bank, regardless of where you have your loan now. At Popular Mortgage we’ll be glad to advise you about the variety of mortgage products and choices available so you can make the decision that’s right for you.
For help and advice, visit one of our mortgage centers across the Island or contact an expert at Popular Mortgage, by calling 787-707-7070. You can also go to popular.com/en/mortgages to calculate your possible monthly payment and for more information.