3 Effective Ways to Avoid Overpaying for a Mortgage

Posted By: Sarah Schwartz

3 Effective Ways to Avoid Overpaying for a Mortgage

Mortgages are arguably the most popular route to becoming a homeowner. Take out a loan from a suitable lender and buy your dream house, then pay back the loan (with interests) in monthly installments. It is that simple. 

Sometimes, homeowners, especially first-timers, may pay more than necessary when taking out these mortgages.  This may not be intentional, considering most home buyers always hurry to get it over with their first major purchase. 

The best way to avoid this problem is to hire a professional realtor in St. Johns. These experts can help you crunch the numbers and ensure you are paying just what is required of you and nothing more on your Clay County home mortgage. 

Important Considerations About Your Mortgage

Looking for a mortgage to cop those homes for sale in Fruit Clove, FL? Here are important factors to consider to ensure you are choosing the best mortgage option for you:  

1. Knowing the interest rate is not enough. 

Most potential homebuyers only look out for the interest rate of a mortgage they want to take out. This is understandable, considering it is the most popular metric in lenders’ advertisements.  But is that all you should consider? No.

Advertised Rate vs. Annual Percentage Rate (APR)

The advertised rate is what you will see when checking out mortgages. However, the annual percentage rate, usually included in the contracts, should be of more importance to you. The annual percentage rate (APR) consists of the total cost of the loan, including the fees, points, and other expenses. The APR is often higher than the advertised rate, and you should compare your loan offers based on this metric. 

Down Payments

You should also consider the down payment because it usually contributes to the overall cost of the loan. The amount of down payment differs depending on the type of mortgage you are considering. For example, traditional loans attract a 5% down payment, and FHA loans attract a 3.5% down payment. On the other hand, VA and USDA loans are no down payment loan options. 

Closing Costs

Closing costs are variable and certainly affect the overall costs of paying a mortgage. Therefore, you should ensure you know what you are paying for.  Your Jacksonville realtor may ask the seller to pay part of the closing costs when buying a home. Some home sellers may oblige, especially if they still net what they want from the acquisition. 

2. Work on your credit score. 

The final amount payable for your mortgage can also depend on your credit score. That is why St Johns realtors often advise potential home buyers to boost their scores before applying for mortgages. You should also clean up mistakes on your credit report (if any).  If you are unsure, your realtor can ask the lender how much a difference you can get by presenting an improved credit score. 

Remember, the goal is to avoid overpaying for the mortgage you need to buy any of the homes for sale in St Johns County. And repairing your credit score will help you lower the cost considerably in most cases. 

3. Be willing to negotiate. 

One of the beauties of mortgages is that you can always negotiate the terms your lender offers, especially in terms of the fees. If you are unsatisfied with any part of the terms, you can commission your Jacksonville realtor to request the necessary adjustments from the lender. You should not be afraid to take this important and valid option. 

Let’s Help You Avoid Overpaying For Your Mortgage

One of the serious mistakes a potential home buyer can make when trying to buy homes for sale in St Augustine Beach, FL, is overpaying for a mortgage. People who fall into this misstep often struggle to see out their mortgages. You can protect yourself from this ugly situation by working with experts. 

Hiring the Sarah Schwartz Group ensures your best interests are well represented at all times. Our top 1% Realtors in St Johns and Jacksonville will guide you through the entire process, from sourcing for the right mortgage option to negotiating the best terms. 

Call us today to discuss your situation.