Chicago Home Mortgages and Mortgage Loan information
Finding the right Chicago condo isn’t the only step in the home buying process. While it is important to spend the time and effort on the search, you should also give a sufficient amount of your time to finding the right mortgage.
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Getting your financing straight starts early! You can’t wait until you’ve found the perfect place to start shopping lenders. As soon as you’ve made the decision to start looking for a condo, start looking for a loan. You need pre-approval and, hopefully, a locked-in rate so you can make sure you get the condo you want. There are many lenders in Chicago, and it is important that you take your time to find the best deal from a reputable source.
Having a pre-approved loan will put you ahead of other people interested in the same property. Why? Because the seller knows the process will be quicker and the chance of the deal falling through slimmer than with someone who has yet to secure a loan. During the pre-approval process, you are as much the interviewee as the interviewer. You will be going through your savings, expenses and earnings to determine how much of a loan you can get. The lenders you visit will do extended credit checks to help determine this figure.
Lending Fees and Interest Rates
But you need to be aware that there are many aspects to the mortgage. You should seek out the best interest rate you can find, but there is more than that rate that will cost you. There are always fees attached to a mortgage, and they are not universal. Lenders fees can be drastically different and, at times, hidden. You want to walk out of each potential lending office with your questions fully answered and all fees and rates in writing with a clear lock-in time period. This will guarantee the cost of the loan for a predetermined amount of time (usually about 30 to 60 days.)
Make sure you arrive with your questions organized, and make sure they are being answered thoroughly. Remember that the first offer will not necessarily be the best for your needs. Ask about each fee and any other aspects of the agreement that you do not understand. Ask whether a typical 20% down payment is necessary, and what the fees or interest rate changes apply for lesser payments for your Chicago Condo.
The mortgage rate is an important factor in choosing a loan. But, you should also be aware of the “points” that you will be asked to pay. The points amount to an early payment that is not against the principle. You need to ask, not only about interest rates, but annual percentage rate of your loan (APR) from which the amount of your payments will be determined. The slightest difference in percentage points could mean thousands of dollars.
Lastly, it is somewhat expensive to apply for a loan—often $300 or more. While it is understandable to want a back up option, it can be costly. Early research and questioning should aid you in finding a qualified, reputable lender that you can trust when closing time comes. When in doubt, always consider utilizing a real estate attorney. A small investment now could save you a great deal in the future.
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Mortgage Term Of The Day
Cap - The maximum allowable increase, for either payment or interest rate, for a specified amount of time on an adjustable rate mortgage.