Another big mistake first time home buyers make to get their home loans is calling up a number of lenders to get quotes. This is certainly a very foolish thing to do since you are letting the lender know that you do not know how to get home loans and they take advantage of your desperate situation. Whenever contacted by phone, most lenders quote a good interest rate just so that they can get your application. Once you are committed to them they will give you a loan at a much higher rate. If you contact by phone, you do not even have any proof of the rate which was quoted by them and thus fall into their trap.
While applying to a bank, you are required to fill out a number of forms and get a number of documents before applying for the home loan. Banks have a tendency to treat you like an account number rather than a person who desperately needs a home loan. This is why you should not approach a bank to get a loan for your dream home.
It is very appealing since the interest rate seems extremely low, but later on you will be paying higher interest rates, sometimes more than the current market rate. Do not get fooled by this since it is nothing like an adjustable rate mortgage and is only there to squeeze the most money out of you.
Buying your first home is an extremely exciting affair, especially when you have found your dream home. You may be buying an overpriced home, but that does not really matter since youre getting a loan to cover the costs. However, if the loan itself is too much, you will end up having to pay for the mistake you have made for the next 15 or 30 years. You definitely do not want to be paying off some incredibly high monthly payments for the next thirty years. This is why you must spend the same amount of time finding a good loan deal as you did in finding your dream home.
Another very attractive offer lenders provide you with is by giving you a low rate which is only applicable for the first few months of the loan. They will quote a rate which is about 2% lower than the current market rate. This is known as a teaser rate.
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