As I sit here right now, I’m about to turn in my earnest check for the first ever house that my husband and I will have purchased. It’s the largest expense (by far) that either of us will have paid for, and to be honest, I’m pretty nervous.
If you’re considering buying a house, you know how much financial brewhaha goes into the process. Your entire monetary life is flashed before multiple peoples’ eyes, and you may never have done as much research on something before in your life. Luckily, there are some resources that can help you out when it comes to that research, like for example this Consumer Financial Protection Bureau Loan Estimate Explainer.
When it comes to your loan, there will be a lot of jargon that you likely won’t understand, so it’s important to ask as many questions as you need to and, if possible, meet with your loan officer in person to go over everything. For our part, having a local loan officer who has worked with our relator before was extremely helpful when it came to putting in an offer quickly in in the crazy Denver-area market. We had already started the conversation with our loan officer before finding the house we wanted (after searching around for different loan options that were competitive using this tool, we found that the local broker offered interest rates that were right in line with other big-name lenders, like Chase and USAA), and he had taken the time to go through the document point-by-point.
In terms of the loan estimate explainer, pay special attention to the ‘Review the Services You Can Shop For and shop for these services’ section, since this is the area of your loan document where you can have some say in how much you spend and who you use. As the site explains, the services listed in this section are required by the lender, but as the person getting the loan, you actually can save some money by shopping around for these services separately. Your lender should provide you with a list of providers for each of those services, and you can choose from the providers on the list. If he or she doesn’t, don’t hesitate to ask.
Remember that each state will have different rules, but for the most part, there should be at least a few services that you can have a say over. In general, title services like title insurance, title search and other costs associated with issuing the title insurance are included what you can shop around for. In our case, the sellers were responsible for picking the title insurance company, and while we could have a say in which company we ultimately want to go with, in deciding to do that research on our own and go with a separate company, we would be agreeing to take over the title fee from the seller, which wasn’t something we wanted to do.
While it might seem daunting to think about doing any outside research on your loan (on top of everything else you’re researching right now), keep in mind that it could save you hundreds, if not thousands, over the long run, so it might be worth it in the end.
If you’re close to closing on your own home, be sure to read this about how to shop around for title insurance and other closing cost services. Also check out this piece about what to know before getting pre-approved for a mortgage, and this one about when to apply for a mortgage without your spouse.
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