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The current housing market is one of the most favorable for buyers in the last decade and many individuals that are tired of paying rent for a place that they cannot redecorate have chosen to purchase a home instead.  There are large numbers of homes on the market and many sellers are willing to reduce the asking price of the home to increase the chances of selling the home. 

Obtaining a mortgage loan has become more difficult for those with lower credit scores, but if you have good credit and a steady income, many banks are still willing to loan the money needed to purchase a home.  Here are some steps that you can take to ensure that you are getting the best loan possible.

Search For The Best Rate
The interest rate for traditional fixed-rate 30-year mortgage loans are still some of the lowest in history and the low interest rate will save you thousands of dollars in interest payments over the life of the loan.  Different banking institutions may be offering different interest rates to lure customers away from competitors and comparing rates between companies may shave several percentage points off of the amount of interest that you are paying on the loan.  Be sure to examine the rates offered by commercial banks, credit unions, and federal loan programs to see all of the options available to you, which will make it easier to make an informed decision about which loan to apply for.

Get Preapproved
One of the worst feelings in the world is finding the perfect home and then finding out that you do not qualify for a loan large enough to purchase that home.  Preapproval provides a chance for you to fill out the application and discover if there will be any problems or barriers to receiving the loan before getting in too deep with the seller or real estate agent.  The lender will run your credit and examine the supporting documents that you provide and reply with a letter either indicating preapproval or denial.  Then, once you have found the home you desire, you can complete the loan approval process by paying the application fee and verifying your income to the satisfaction of the lender.

Lock In Your Interest Rate
Many lenders will not lock in the interest rate that you will be paying on the loan until 30-45 days prior to closing because interest rates can fluctuate from day to day and most loan interest rates are tied to the going rate.  The final interest rate that is offered to you should be very close to the one that was offered to you during your preapproval process and if the interest rate is dramatically different, you should inquire why.  If the lender cannot give you a good answer backed up by supporting documentation, they may be trying to rip you off and you should find another lender.  In the recent past, there have been many instances of this type of bait and switch documented, so don’t fall prey to unscrupulous lenders because you do not want to push back the closing date by several weeks.