Common Questions About Getting a Mortgage to Buy a Home in Lakewood
If you're like many people, you know you'll need a mortgage to buy a home in Lakewood or Long Beach - but you probably have some questions. This guide addresses the most common questions about getting a mortgage to buy a home.
Why Do You Need to Talk to Multiple Lenders Before You Get a Mortgage?
When you're shopping for a mortgage, it's important to compare rates and terms from multiple lenders. This way, you can be sure you're getting the best deal possible.
Talking to multiple lenders also gives you a chance to negotiate. If one lender offers you a higher rate than another, you can use that as leverage to get a lower rate from the second lender.
Comparing rates and terms from multiple lenders is the best way to ensure you're getting the best deal on your mortgage. Be sure to talk to at least three different lenders before making a decision.
Do You Need to Be Preapproved for a Mortgage Before You Start House-Hunting?
You should get mortgage preapproval before you start house-hunting. That's because being preapproved gives you a better idea of how much you can afford to spend on a home.
When you're preapproved, a lender will look at your income, debts, and credit history to determine how much they're willing to lend you. This way, you know your budget before you start looking for a home.
Another reason preapproval is so important is that it can help sellers take you seriously. When you find a home you love, you'll want to put in an offer right away - and if you have a preapproval letter, it may reassure the seller that you can actually get the cash to buy the home.
What's the Difference Between an ARM and a Fixed-Rate Mortgage?
The two main types of mortgages are adjustable-rate mortgages (ARMs) and fixed-rate mortgages.
An adjustable-rate mortgage has an interest rate that can change over time. typically, the interest rate on an ARM is lower than a fixed-rate mortgage for the first few years of the loan. After that, the interest rate may go up or down, depending on market conditions.
A fixed-rate mortgage has an interest rate that stays the same over the life of the loan. This makes it easier to budget for your monthly mortgage payments.
What is Private Mortgage Insurance?
Private mortgage insurance (PMI) is insurance that protects the lender if you default on your mortgage. If you put down less than 20% when you bought your home, chances are you're paying for PMI.
While PMI can be annoying - it's another monthly payment, after all - it does serve a purpose. By insuring the lender, PMI allows people to buy homes with less than 20% down.
Does a Higher Credit Score Help You Get a Lower Interest Rate on a Mortgage?
A higher credit score can help you get a lower interest rate on a mortgage. That's because lenders view borrowers with higher credit scores as less of a risk.
If you're looking to get the best interest rate possible, aim for a credit score of 760 or higher. This is the "prime" credit score range, and you'll likely get the best interest rate available if your score is in this range.
Are You Buying or Selling a Home in Lakewood?
If you’re not already living in Lakewood, or if you are but you’re looking for a new home, we’re here to help. Call us right now at 562-882-1581 or start browsing our Lakewood real estate listings to find your dream home today!
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