As a home buyer, one of the most important things that you can do is find the right mortgage. Even a slight difference in interest rates can significantly impact both your monthly payments and the amount of money that you have to pay over the life of your loan. Additionally, there are many other expenses associated with taking out a mortgage including closing costs and mortgage insurance.
In order to effectively compare St. Louis mortgages to say Kansas city mortgages, you need to understand what all of these fees are and how they affect both your monthly payments and the overall amount of interest and fees that you will pay throughout the duration of your loan. This will allow you to get an accurate side-by-side picture of which mortgages are best for your needs.
To get the best possible rate, be sure to get your credit report in good shape before you start applying for mortgages. Typically, you should start cleaning up your credit at least six months before you plan to apply for a loan. This will help ensure that you have time for any changes that you make to take effect so that they can raise your score is much as possible. The higher your score is, the more loan offers you will get and the better interest rate you will qualify for. This can dramatically lower your monthly payments and save you a lot of money over the long haul.
Next, you may want to consider applying through an online broker that works with many different mortgage companies. This will allow you to get a number of different loan offers without having to fill out an individual application form for each lender. As you can well imagine, this can save a lot of time.
Once you get one or more offers back, you need to take a close look at them to be sure that you fully understand all of the associated fees and interest rates for the loan. Write down these figures for each loan offer that you get. Plug them into a loan calculator and see how they stack up against one another. A good place to start is by comparing the closing costs and associated fees. Add up all of these fees and see which lender comes in the lowest.
Next, calculate what your monthly payments would be on each of the loan offers that you received. Determine how much of that payment is going to interest and how much is actually going to pay off the principal of the loan. Additionally, crunch the numbers to find out how much of your loan you will have paid off after five years. This will help you gauge approximately how much equity you will have in your home at the end of this time period as long as real estate prices stay relatively steady.
In the end, by comparing St. Louis mortgages, you should be able to find which lender has the best deal for you. Taking the time to add up closing costs and other fees as well as to compare interest rates can help you pinpoint which loan is right for your long-term goals and objectives.