Think all lenders are the same?
Think again!
One of my clients discovered some big differences last week when they were getting interest rate quotes. They got a 6% interest rate quote from one lender, and a 4.75% quote from another. Same terms and conditions, MAJOR difference in what my client would pay over the 30-year life of the loan!
When you’re looking for a lender, it obviously pays to shop around!
In fact, finding the right lender can be the deciding factor between buying your own home, or continuing to pay rent. Here’s why:
- Your interest rate determines your monthly mortgage payment, and that determines how much house you can afford. If high interest rates price you out of the housing market, you may be forced to rent for the foreseeable future.
- Interest rates add up over the life of your loan. You’re going to be paying off your house for 20-30 years, and a high interest rate can add tens of thousands of dollars to your total cost. Sure, you can refinance when interest rates drop, but that can be expensive. And if you’re already upside down on your mortgage, refinancing won’t be an option.
- Your debt-to-income ratio decides how much you can afford to pay each month for your home. If you can afford to pay $2-3,000 per month, you should easily be able to afford a house, right? Not so fast… If a high interest rate jacks up that monthly payment beyond what you can afford, you’ll be forced to throw that money away on rent rather than building up equity in your own home.
Remember, your lender is here to serve YOU, not the other way around. Take time to find one who is willing to work with you and your budget to ensure you find a loan that meets your needs.
If you’re not sure where to start, ask your agent! I can guarantee that they’ve worked with nearly every lender in the area, and they can tell you who’s great and who to avoid at all costs!
