Whether you’re buying your first home or your third, the processes involved in choosing the right mortgage can leave you feeling overwhelmed. Numerous mortgage quote comparison websites exist to help you weigh your options, but it’s important that you use them wisely to get the most out of them.
Interest Rates Aren’t the Only Consideration
When it comes to finding the right mortgage, most homeowners will look primarily at interest rates. In fact, this is the number one filter when it comes to mortgage quote comparison websites. It’s true that lower interest will save you plenty of money over time, but you should never agree to a loan just because it comes with a great interest rate. There’s fine print to read, penalties to understand, and even the lender’s overall reputation and financial stability. These things can all affect you in the future, so be sure to research each lender thoroughly.
Know Your Credit Score and Debt-to-Income Ratio
While your credit score is a huge deciding factor when it comes to getting an accurate mortgage quote comparison, it isn’t the only thing you need to know. Your debt-to-income ratio will also play a major role in what you can qualify for, including not only the maximum mortgage amount, but also the interest rate. To qualify for a jumbo loan with a fantastic rate, you’ll need more than just good credit – you’ll need an excellent credit rating and several open credit accounts. You’ll also need a solid debt-to-income ratio. Ideally, your debt should not total more than 40% of your income.
While a mortgage quote comparison website should only be used as a guideline, it’s important that you answer any questions you’re asked truthfully. While you may think that fudging a little on your annual income or your credit card debt won’t hurt anything, it may present a significant issue when it comes to applying for a loan. For example, while the website may tell you that a specific bank will loan you up to $750,000, if your income is less than what you provided, or if you have more credit card debt than you let on, you might find that number has shrunk significantly by the time your loan makes it through underwriting.
Try More than One Website
Mortgage quote comparison websites work with networks of lenders. You fill out a single application, and that information is fed to as many as 20 or 30 different lenders to help give you an idea of what you might qualify for. However, different websites have different networks, so you may want to try a few for a broader reach. You may see the same big-name lenders on every site, but the smaller lenders may be different.
All in all, getting the most out of a mortgage quote comparison website is about knowing your credit score and your debt-to-income ratio, being honest when you fill out the quote form, using more than one website to get results, and paying attention to more than just the interest rate you’re offered. When you follow these tips, you’ll have plenty of lending options available to suit your needs.