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It’s easy to get so caught up in saving for a down payment that you forget about finding a good interest rate for your home loan. But did you know that it’s possible to purchase a home in NC for zero to low money down? Unless you’re paying cash upfront for the full purchase price, though, you’re more than likely going to need a home loan. And those are paid with interest.
What’s more, the rate on your loan significantly affects your monthly mortgage payment. Your interest rate changes how quickly you pay your home off. And depending on the rate, you could pay tens of thousands of dollars more over the life of your mortgage.
Are you prepared to get the lowest interest rate possible on your upcoming home loan? Make sure you’re not sabotaging your chances. Here are three things you’re doing wrong and how to fix them.
DON’T: Screw up Your Credit Score
Applying for new credit cards. Requesting new credit inquiries. Buying a car. Buying new furniture and charging it to your card. All these actions negatively affect your credit score, even if just for a short amount of time. However, if that time coincides with when you apply for a home loan, your lender will see it. And they will be more likely to tack a larger interest rate on your home loan. For some applicants, a few points on your credit score could even determine whether you get that mortgage loan or not.
INSTEAD: Avoid applying for any other type of credit before and during the mortgage application process. If you have to make a large purchase, pay cash for it. You’ve worked hard to pay down debts and save up money for your new home. Don’t ruin your efforts on the last mile of the race.
DON’T: Choose an Online Lender
Not all home lenders are created equal. If there are any “gray areas” on your loan application, it pays to choose a lender you can speak with face to face. If you’ve never had credit in your life, if you’ve recently quit your job, if your credit was damaged badly in the past—these can be red flags for online lenders who only see you in terms of your financial history. If they give you a loan at all, you better believe that it’s going to have a higher interest rate!
INSTEAD: Choose a lender who can partner with you and your buyer’s agent. It takes a team effort to get you to closing on time and make the purchase experience as seamless as possible. Your loan officer is an important player on that team. If you don't yet have a lender, contact us and we will send you at least three that can assist you.
DON’T: Switch Jobs
It may not feel like it in today’s fast-paced real estate market, but slow and steady is the name of the game with mortgages. Your lender is essentially making a 30-year commitment with you, and they want to make sure they can count on you for that time. If at all possible, don’t switch jobs right before or while in the middle of applying for a mortgage.
INSTEAD: Show that you’re steady and trustworthy. Don’t decide midstream that in addition to buying a home, you’re going to quit your 10-year nursing career to start that pie shop you always dreamed of. If you get a great career offer you can’t refuse, talk it over with your real estate agent and loan officer—they’re here to make sure all your dreams come true.
All real estate is local. In order to make confident real estate decisions, we believe it is important for you to have timely and neighborhood-specific information. If you would like more information about buying a home in NC, our experts at EXP Realty are here to help. Contact us today to speak with a EXP agent about buying homes or land in North Carolina.