Borrowers are NOT Tied to a Single Lender

Attention Homebuyers: Learn About Mortgages to save you From a Costly Mistake
Multiple news outlets have reported that the real estate market, as a whole, is steadily improving month to month. This indicates that more people are looking to buy that quaint first home and continue their journey towards the American dream. For the first time buyer, obtaining a home can be exhilarating as well as nerve-racking and even confusing. Here are some critical pieces of information that every prospective buyer needs to be familiar with before signing a mortgage.
Down Payment
Buying an automobile usually will require some form of a down payment. The same can be said for buying a home, MOST of the time. Various types of loans will ask the buyer to pay up front between 3% and 20% of the home’s value as a down payment. However, there are a few exceptions.
For instance, a VA mortgage and a USDA mortgage do not require any down payment. The FHA loan requires a down payment, but the money can come from a relative in the form of a gift. Restrictions apply to each type of loan, but these three types of mortgages are quite popular and get approved on an almost daily basis.
Making Sense of the APR
The Annual Percentage Rate (APR) is a simplified way to compare multiple loan offers. In a nutshell, the APR illustrates the costs associated with the loan as a percentage. There are common costs found with most mortgage loans such as an appraisal, title insurance and recording fees. These costs are factored in to the APR.
But each lender has some flexibility in other costs charged to the loan along with various fees. And each lender has established working relations with appraisers and title insurance attorneys in order to offer their “own” costs. Thus, comparing two loans requires a bit of work.
Using the APR allows the borrower to look at two or more loan scenarios and determine what is best for their situation.
Borrowers are NOT Tied to a Single Lender
Some potential home buyers, especially those searching for their first home, feel they must use the lender that first offered a pre-approval. Unless the buyer has signed some type of agreement with the lender (which is a bad idea) there is no legal statute requiring the borrower to use any particular lender.
Buyers are free to call multiple lenders and get various offers for financing. However, it is fair to note that each time a lender requests a credit report on the borrower that the score will be slightly affected.
Please keep in mind that this is not advocating for all potential home buyers to become an expert in mortgage terms. Owning a car does not require a person to become a certified mechanic. However, there are basic things a person should know about a vehicle such as changing out the oil regularly, rotating the tires and using premium fuel. In the same way, people should become familiar with basic mortgage information so that they are better prepared for the process and can make a proper decision.  Call Network Real Estate today for all your Wilmington NC real estate needs.  Our agents can help you with real estate in Carolina Beach , Kure Beach , Wrightsville Beach or the Wilmington NC area.  Visit our easy to use website at www.NetworkWilmington.com