House hunting can be an exciting time, but if you’re financing your home, obtaining a mortgage is a necessary first step. Although a pre-approval is not ironclad, it’s usually a pretty good indication of the financing you can expect to receive when it’s time to close on your home. Because so many homeowners are just so happy to even get approved for a mortgage, they’ll often accept it without thinking twice. However, it’s not always the best idea to accept the first approval you receive, and knowing when to walk away can potentially save you from a lot of regret later on. You might want to keep looking if:
You didn’t receive the amount you wanted
Receiving a much lower loan amount than your housing budget can be a major disappointment, but sometimes, it could work out for the best. Just because you can afford a certain amount doesn’t mean you necessarily have to buy a home that costs that much. However, you have to be sure that you’re really okay with this, and not just settling for a lower-priced home because that’s all you were approved for. If you end up in an area you don’t want to be in or a much smaller home than you pictured, you could end up regretting it. Wait until your situation—whether it’s your income and/or credit—improves and you qualify for the loan amount you initially wanted.
The interest rate was too high
Mortgage payments are made up of various charges, including interest. If the rate you received was a bit higher than you hoped for or expected, you might want to wait. Even if you can afford the mortgage payments with the interest rate you were given, simply waiting it out can mean saving a lot of money over the years on the cost of your home. Many homebuyers will just accept any interest rate they’re given, with the plans to refinance later on. However, refinancing can be an expensive and complex process.
You aren’t completely sure about the type of mortgage you want
You applied for an adjustable-rate mortgage, but now you’re wondering if a fixed-rate mortgage would make more sense for you. Or, perhaps it’s the other way around. If you jumped into the mortgage and home hunting process very quickly, you may not be familiar enough with mortgages to know what the different terms mean and what would work best for you. Do your research and make an informed decision, even if it means declining the initial offer you received and making a decision later on in the future.
You didn’t shop around yet
Mortgage lenders expect consumers to apply for loans from various banks and institutions before final decisions are made. If you only applied with one lender, don’t be afraid to take a step back and make your decision later on. Apply with others and see if you’re offered more favorable terms before you choose your lender.
Do you want to buy a home, but need the money for your down payment? If you’re receiving annuity or structured settlement payments, you may be able to sell some or all of them for a lump sum of cash. Contact Peachtree Financial Solutions today to learn how you can sell future payments for a lump sum payout.
Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services.