Sellers often think in terms of….selling. It’s easy to do, you spend hours upon hours preparing your home, endure the marketing period where you have strangers walking through your home on any given day, manage the inspection negotiations and the appraisal process, and many other steps along the way. It’s easy to see why Sellers don’t think of the mortgage, there are so many other fun things to focus on! The neighborhood. The amenities. The floor plan. The schools, and on and on!

If you are thinking of selling your home, here are some great tips for looking into that next mortgage. The industry has changed so much over the past 5 years, you will be glad you followed these guidelines.

Excerpts from NE Moves Mortgage, click here to read the article in its entirety.

“To truly find the best deal on a mortgage loan, it is essential to first determine what type of loan you need. The mortgage industry has been extremely adaptive in creating all sorts of loans designed to fit all sorts of borrowing needs. Because of this, home loan lenders have become highly specialized in the programs they offer. Each of these lenders will be able to offer you better rates on their specialty program than they would on other loans. Figuring out exactly what type of home loan your situation calls for will help you know where to start shopping.”

Here are some helpful questions that can aid you in determining what type of loan and what type of lender you need.

1. First, how much do you need to borrow? Some lenders only loan up to the Fannie Mae conventional loan standards (currently $417,000) while other will have jumbo loan programs available. Do you have the willpower to borrow less than you need, in case of an emergency or change in health status? Be strong, the total amount you qualify for does not mean you have to borrow it all!
2. How much of a down payment can you supply? There are lenders that only make loans to borrowers who have 10-20% to put down. The days of moving into a home for less than 10% down are not a thing of the past, but it’s not easy. Having a realistic picture of what your down payment will look like helps you keep the selling price of your current home
3. What type of loan term are you looking for? Most offer 30-year fixed loans, but others will offer 15-year loan terms. You may be lured by the lower payment of the 30 year, but if you plan on making this your ‘last stop’ and retiring here, how great would it feel to have that mortgage paid off in 15?
4. How much documentation are you willing and/or able to provide? Lenders require you to provide proof of income or other financial factors. Folks who are self employed and have little in the form of a down payment or reserve funds can be the hardest to qualify, so make sure your lender has experience in getting loans for clients who have a situation like yours. Likewise if you’ve changed your career recently, your lender needs to know this up front.
5. Are you applying for a loan for a single-family home, a condominium, or a unit in a duplex or triplex? There are lenders that specialize and can provide the best rates for each of these types of dwellings. Don’t go to a commercial lender because he’s a friend of a friend. If they do not actively close residential loans, ask for a recommendation to a lender who does, and your Realtor can recommend a specialist to you.

You can probably now see why mortgage brokers have become such a popular choice among borrowers, as they have connections to many different lenders and it is their job to find a lender that specializes in your particular type of loan needs!

Ultimately the mortgage you choose will give you a minimum down payment that is necessary to obtain the loan. Discussing this number with your Realtor prior to listing your home can save you time and a giant headache! Remember, mortgage requirements change every day, so if your home does not sell in a reasonable amount of time, you will want to shop alternate loan options to reflect a lower sales price, if necessary.

It is also important to note that some types of loans are always going to be more expensive than others, no matter which lender you turn to. The cost of a loan is determined by the various risk factors involved. A basic example is the risk of a borrowers credit score. A borrower with excellent credit is going to find better interest rates with any lender than a borrower with poor credit will.”

In closing, preparing for a new mortgage can be described the same way as preparing to go out in the cold: You can never be too prepared! Don’t forget, your Realtor is a walking knowledge base as well when it comes to home loans, and most are ready and willing to answer your questions!