How to save money on your first time home buyer loan

Peter Thompson is a long time resident of the Chicago area, and has been a mortgage loan officer specializing in helping first-time home buyers since 1992.

As a mortgage lender specializing in first time home buyer loans and Illinois mortgage loans, I know how important it is to save money on your mortgage. For most people, whether it is rent or a mortgage, housing is their biggest expense. If you are buying a new home, there are a lot of ways you can save big money on your home expenses.

Here are some tips for getting the best mortgage deal when buying your home:

Don’t buy more than you can afford. Put together a budget and make sure you feel comfortable with your new payment (keep in mind, much of your mortgage payment is tax deductable).

When negotiating the contract for the purchase of the home, ask the seller to pick up some or all of your closing costs. This is a common practice now, and this could save you thousands of dollars up-front.

Compare different lenders to see who offers the best deal. There can be a big difference in the cost of a mortgage from one lender to another. Let each lender you talk with know you are shopping and ask for their best deal.

Make sure you are comparing apples to apples. In mortgages it is too easy to get taken if you are focusing on only one thing. If you are just looking for the best rate, you may end up paying a lot more for closing costs. The lowest payment isn’t always the best deal, and it can be confusing if you have options with different Illinois Mortgage Rates and different closing costs. If the lenders you are talking with are quoting different rates, pick a rate and ask each lender how much it will cost to close at that rate.

Once you have narrowed the field down, ask if they will waive any additional fees. They may or may not, but it never hurts to ask.

Make sure you are getting the program that works best for you. Adjustable rate mortgages can save you a lot of money compared to a fixed rate, if you don’t plan on being in the home long term. This makes sense for a lot of first time home buyers. A 15 year mortgage costs a whole lot less than a 30 year over the life of the loan, if you can afford the higher payments. The key is that everyone’s situation is different, and you should get the mortgage that is right for your needs.

Get all the terms in writing and make sure that your rate will be locked in long enough to close the loan. The lender will give you a Good Faith Estimate of closing costs, and a lock-in agreement showing that they have committed to the terms you agreed to.

Research your lender. Even if someone offers the best deal, it won’t work for you if they aren’t able to close under the terms you agreed to. Do a Google search and ask your Realtor and attorney what they know of the lender.

Go with your gut. Whoever you work with, you are relying on them to help you take on the largest purchase of your life. Do you feel comfortable with them? Does their advice make sense? Do they return phone calls and are they responsive? If not, you may be heading into problems.

Saving money on your mortgage and home purchase goes a long way toward making your budget more manageable. A little planning ahead of time saves a lot down the road.

Mortgage First time home buyer loans