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One of the challenges many first-time home buyers face is not knowing if they are overpaying for a mortgage. It is important to understand the various items that will impact your interest rate and the type of loan you will qualify for before you start shopping for a home. Some of the factors you should consider to understand how to avoid overpaying for a mortgage include:
There are some costs associated with a mortgage which are non-negotiable such as appraisal fees, property taxes and insurance. However, other fees like application fees, loan origination fees and interest rate points which may be negotiable. Talk to your loan officer to determine whether you can have some of the fees reduced before you agree on a final mortgage offer.
First time buyers should also be aware of the various aspects of mortgage which are impacted by a down payment. For example, not only will a higher down payment potentially lower your interest rate, if you put down at least 20 percent you will avoid paying mortgage insurance premiums. Be sure to discuss this with your lender, these premiums can be very expensive and will have to be paid until such time as your home equity equals 20 percent; making a larger down payment can save you significant money.
If you have applied for a loan and you are now asking yourself ” Am I overpaying for my home mortgage? ” Contact Federated Lending in Bucks County, PA and let us review your current loan offer and help you make a decision as to whether you can lower your overall costs with a different loan program.