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Five Things That Many New Home Buyers Might Not Be Aware Of

Written by Posted On Saturday, 12 September 2015 23:05

A recent survey suggests that there are many facets of the home buying process that continue to elude future home buyers. Below are some of the more astonishing outcomes of the findings, along with a list of five things that home buyers do not understand, but should:

1) Mortgage Rates Change Daily
A whopping 55 percent of prospective home buyers don't recognize that mortgage rates, which are established by a slew of variables, can - and do - change daily (and sometimes more than once a day if specific economic reports are released.) To get the best rates, you have to monitor them and shop around. After all, a change in a rate of a mere .125% to .25% could mean thousands of dollars in savings every year.

2) Your Lender's Fees are Actually More Flexible Than You Think
The bottom line is that you are going to have to pay lender fees when you put in an application for a mortgage, and that is regardless of what sort of home you choose. And these fees -- from origination fees to credit report fees to appraisal fees and more -- can add up quickly. But the great news -- and what 34 percent of prospective home buyers don't understand -- is that fees vary from one lender to the next, but that they're negotiable. All the more reason to shop around for mortgage rates that are different from various lenders.

3) FHA Loans Are Offered to Any or All Buyers
More than two in five (42%) prospective home buyers think that only first-time buyers qualify for an FHA loan, a mortgage insured by the Federal House Administration. That's not the case. Actually, these loans are offered to any or all buyers who satisfy eligibility requirements. Among the key advantages: minimal down payments, slacked credit score requirements, low prices, and interest rates that are much more appealing.

4) Pre-qualified does not mean much
Merely because you have been "pre-qualified" for a loan does not mean you've secured financing, yet 37 percent of prospective home buyers think it does. When a lender "pre-qualifies" you, they only approximate how much you really can afford, but do not run your credit or request any type of documentation to confirm the information you supply. It's not until a lender has approved your loan application without conditions that you have got a firm dedication.

5) Interest rates on ARMs Aren't Consistent
While interest rates on 5/1 ARMs do usually improve after 5 years, rates could fall. Be sure to keep this and everything else in mind when you're looking for a loan.

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Kenneth Johnson

scottsdalerealestate.com/

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