Don’t chase after interest rates.
Interest rates are always going to fluctuate. Chasing around for the lender with the best rate is less important than finding the best lender.
Find a good lender that you can trust.
A lot of buyers flock to Lending Tree to find their rates. Although Lending Tree is a powerful easy-to-use platform, it’s not always the best. You will be thrown into a huge pool of bidders trying to churn through as many buyers as possible without offering a high level of service. You don’t want to lose out on a house because you’re working with someone that isn’t putting care into your case. When shopping around always ask for a cost estimate or good faith estimate. If will give you a true breakdown of what you can expect to pay for the loan. Fill out my form and I can put you in touch with the perfect lender for your situation.
Learn from the lender beforehand.
Learn as much as you can from the lender before you put in any offers. You don’t want to be under pressure before settlement figuring out the detailed financial logistics.
Closing costs in the city of Philadelphia are around 6% (mainly from the transfer tax), in the suburbs they’re around 5%.
Don’t open new lines of credit and have your money in the bank well before you’re ready to make an offer. During the underwriting process when you are trying to get approved for the loan can take 30~45 days. During this process, they are hardcore monitoring your credit. Do not make major house purchases before settlement. Getting financing for 4k worth of furniture a week before settlement, looks bad to your lender. It can hurt your chances of getting your loan approved. Do not open up any credit cards within two months prior.
Closing costs are separate of the down payment. So if you’re putting 50k on a $250,000 house to start at 20% equity, the lender fees, title company, and the state transfer taxes are factored in separately.
If you have a spouse, most of the time you want to apply for the mortgage together because the lender will use your combined income. However, if one of your credits is much lower, you might want to try and be on the mortgage by yourself. The lender will always use the lowest credit score of the both of you.
Make sure you’re represented by a buyer agent.
If you’re interested in a home, do not reach out to a listing agent directly. When you do, they automatically represent both you and the seller in the transaction. This creates a huge conflict of interest, as the agent naturally favors the seller’s interest in the transaction. Agent commission is always paid by the seller in a real estate deal, so as a buyer, representation is always free.