I am a big believer that people should be informed and educated on mortgage loans. This is the single largest purchase of your life and you only get one chance to do it right the first time. Home ownership is one of life’s major events, and it provides some unique personal and financial rewards. It can provide lasting stability and security and a great place to relax at the end of the day.
Here are a few things to consider if you’re still undecided about taking that leap:
- Home ownership may offer you important tax benefits.
- You’ll have the potential to build equity. This is the portion of your home that you’ve paid for, plus any rise in its value.
- You can decorate and remodel your home to suit your personal tastes.
- It’s a potential investment, since your home’s value may appreciate over the years.
- You won’t have to worry about your rent going up when your lease expires, or having to move if your rental property is no longer available or affordable.
This month we will discuss this very important step: Do I want to purchase a home?
Let’s think about that for just a second. The knee-jerk reaction is “of course I do," but in reality you have no idea how or where to start. The very first thing you should do is to find a mortgage lender. You can ask friends, family, or colleagues for the name of the lender they worked with when they purchased a home. Please know that it is important to feel informed and confident with your lender. Getting more than one option and talking to more than one lender is absolutely the right thing to do. I know, I know, I am a lender and other lenders will not be happy that I tell you to do that. The truth is that when you have your credit pulled for a mortgage within a 14-day period, it is very unlikely that your credit score will be impacted any more than if it were only one lender checking it. Do not have more than three lenders pull it because rates are rates and all lenders are very close in that area and when you have more than three options it becomes less helpful and more confusing.
Avoid online lenders. They are not familiar with all markets and central Ohio has its own quirks when it comes to who pays for what and what credits the buyer receives from the seller. You need to feel confident in your decision. You will feel like you are going to a financial therapist when you start talking to a lender. We ask questions that have always been “taboo” to talk about: How much money you make, the debts on your credit report, and how much money you have in the bank. These are all serious questions and are a requirement for your lender to know. This confidential information is not shared with anyone unless you as the borrower provide us with the permission to do so.
Let’s wrap this month’s discussion up with a final thought. Before you start house hunting, find a lender who cares about you, one you trust, and who has the knowledge to help you with purchasing the place you call home.
Cynthia is the Branch Manager at the Stearns Lending, 1900 Polaris Parkway in Columbus and can be reached at CCarr@Stearns.com.