Applying for a home loan is one of the bigger steps you will take when buying a new home. But many people make the mistake of not shopping around for a home loan that suits them. Is it really important to shop around? For sure!
Here are 3 great and important reasons why you should shop around for a home loan.
Explore All Your Options
A loan application can sometimes take a little time to fully process. But there are many things you can do beforehand, such as ensuring that your credit score is really healthy. A good credit score will allow lenders to be more flexible with your terms. In other words, your credit score will influence your negotiating power with a lender. But besides that, these reasons listed below might be reason enough to explore various options.
Compare Rates and Fee
Just as you would shop around for a good deal, so you should shop for the best rates for your loan. A home loan is a product that is subject to the terms and fees of the specific lenders. This means that you can expect to see different rates and fees from the various lenders. Looking at the various lenders, you will easily be able to compare and investigate the fees. From there, you can choose the lender that could best help you at rates that are comfortable to you.
Asking Questions and Reading the Fine Print
It is vital to ask as many questions as you need to. Make sure that the lenders can assist you with any current and future plans. Ask the lender about fixed versus variable loans so that you can make informed decisions. Make sure that you are fully informed and that you understand all the terms involved. One lender might offer you more of the services you need than another. This is a great way to ensure that you are fully covered in the future.
Negotiation is Key
Many lenders are reasonably flexible depending on your credit status and available deposit. Make sure that you can negotiate for the best rates and fees. The best way to ensure that you have negotiating power is to get your finances in order. This will make it difficult for the lenders to turn you away.
Some home buyers prefer to have a broker who looks for various loan options on their behalf. This might be a useful way to go if you are uncomfortable with fine print or negotiating. They draw up all the comparisons for you and help you with any questions you may have. Once you have chosen your lender, consider getting pre-approved. This means that the home-buying process runs faster, smoother and will give you an accurate idea of your affordability.
The Milkwood Townhouse Complex is a brand-new secure estate situated in the idyllic Kuils River in Cape Town. These units have no transfer costs and are ideal for first-time buyers to get into the property market. Contact one of our agents to book a viewing appointment today.