Applying For A Mortgage
You found the house you love, you made a bid, the seller accepted, house inspection went through, and now you need a mortgage.
When we found the house we wanted to buy, we thought we had gone through the hardest part. We saw dozens of houses. The process was pretty exhausting because we had to see the houses before more potential buyers saw the houses. The market was really hot. Supply was extremely low and there were many buyers motivated to buy. But getting a mortgage was even more exhausting.
Let’s face it; even though the government “tried” to make mortgages more “understandable by the common folk,” understanding mortgages is comparable to deciphering hieroglyphics. We looked at three different companies for our mortgage.
- Online (Quicken) – We completed an online application. We then had a call with a Quicken representative. He was actually pretty great. He explained every single line item. When he didn’t know, he would say so and go ask a supervisor. There are other companies like Discover where you can start your application online.
- Personal Bank – We, also, talked to our personal bank. We received similar help. It is our bank, but at the end it was the mortgage branch of our bank that provided us information about interest rates, closing costs, etc. via the phone. Brick and mortar banks you can use include Bank of America, Wells Fargo, or Chase.
- Brokers – We, also, asked a mortgage broker. This representative came through a family recommendation. Usually these are LLCs. An example in the UK would be First Mortgage mortgage brokers.
Items you will receive when applying for a mortgage:
Cost of the Lender making you a loan
Estimated Closing costs
Estimated Insurance Costs
The documents were confusing. It was stressful to talk to all three companies and try to negotiate a better rate. At the end of our negotiation, terms weren’t even really established until you signed the dotted line. What was also nerve racking was locking in our interest rate. We didn’t want to lock it in until we were sure we were going to buy the house. A couple days of hesitation meant we ended up with a slightly higher interest rate. Our realtor said it wouldn’t matter. Just a couple dollars difference on your monthly payment. But throughout the term of the loan we will end up paying about $4,000 more. Sure $4,000 doesn’t seem like a lot spread out over 15 years, but $4,000 could buy us a really nice international vacation.
Did you find applying for a mortgage as confusing as we did?