Earlier, borrowers used to compare mortgage rates, find the lender, make the large down payment and just move in. Today, there is variety of options and going through all the options could be even more stressful. You should educate yourself before shopping for the mortgage deal. Then you should assess your own financial situation. How much you can earn? How secure is your job? Normally, mortgages are repaid in fifteen to thirty years. Therefore, you should choose for a mortgage only if you can afford it.
If you think that you can afford a mortgage then the next thing will be that how much you can afford. You should have sufficient amount as down payment. Because interest rates of your first mortgage will depend on down payment also. Other important factor that will affect interest rate is your credit record. If you have a good track record of repayment, mortgage lenders will offer a decent rate of interest onfirst mortgage.
When you begin your search for the lender, you will encounter two types of lenders-direct lenders and mortgage brokers. Direct lenders are the one who provide you mortgage directly. But a direct lender will have limited number of loans available, whereas a mortgage broker will have access to multiple lenders simultaneously.
Mortgage brokers will either charge certain percentage of the mortgage or they will not take money from you. At times, they charge their fees from the lenders only. So, you can also get help of mortgage brokers to make your first mortgage a huge success.
Have the lender or broker write down all the costs associated with the loan. Then ask if the lender or broker will waive or reduce one or more of its fees or agree to a lower rate or fewer points. You'll want to make sure that the lender or broker is not agreeing to lower one fee while raising another or to lower the rate while raising points. There's no harm in asking lenders or brokers if they can give better terms than the original ones they quoted or than those you have found elsewhere.
Once you are satisfied with the terms you have negotiated, you may want to obtain a written lock-in from the lender or broker. The lock-in should include the rate that you have agreed upon, the period the lock-in lasts, and the number of points to be paid. A fee may be charged for locking in the loan rate. This fee may be refundable at closing. Lock-ins can protect you from rate increases while your loan is being processed; if rates fall, however, you could end up with a less favorable rate. Should that happen, try to negotiate a compromise with the lender or broker.