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Home Buyers Face Decisions that Affect Long-Term Financial Picture

Taking the step into home ownership is one of the most important financial decisions a couple will ever make. There are hundreds of loan programs available, and it is important to find the one that best fits your long-term financial goals.

First and foremost, you must have a mortgage consultant in your corner who is willing to take the time to understand your goals. Often prospective home buyers turn to the Internet just to see what current interest rates are. These faceless web sites will not guide the potential borrower through the many nuances of the loan process, and will offer programs to reel prospects in with attractive rates that are based upon unrealistic time frames.

If a lender offers a terrific rate based on a 10-day lock-in period, it is unlikely that the potential home owner can find a dream home, get through the negotiation process and secure a lender within that time. This is called short-pricing, and when it comes time to close, the rate that was originally offered is gone and the home buyer is bulldozed into a loan program with a higher interest rate. It is unlikely that a qualified loan originator whose business is based upon referrals will use unscrupulous tactics such as this to get new customers!

Laying out your goals with your mortgage consultant will have a tremendous impact on choosing a loan program that meets your needs, like considering the length of time you will pay on the loan. If you know you will only be in the home for five years, it wouldn’t make sense to opt for a 30-year program or pay points up front to secure a lower interest rate. You would not be in the home long enough to benefit. Defining viable options for your interest rate and amortization schedule, monthly payments and any potential savings is your mortgage consultant's job!

- Nichoelle Waldner, First Bank & Trust, Sioux Falls, SD

This article was also featured in the 2009 VOW Wedding Planner. To view a PDF of this article, go to the HOME, FINANCE & AUTO section of VOW.