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A few years ago, while at a print shop, I saw the following sign:
Fast. Good. Cheap
Pick any two.
The logic goes that you can have something printed for cheap and get is fast, but it won’t be good. Or you can pick good and fast printing and it won’t be cheap. Or Good and cheap, but it won’t be cheap.
Mortgages work the same way. It is impossible to get a mortgage for a short term, and a low rate and have low payments. Although you really don’t have the option of picking any two. And it is highly unlikely that two customers will walk out with the exact same deal.
I find that most people (some you’d even consider sophisticated, learned, savvy, professional) do not understand how a lender decides if someone qualifies for a mortgage or not, or what they qualify for. Most people are under the false assumption that since they make X amount of dollars, they should automatically qualify at a lender’s best rate.
Sitting down with a mortgage broker and figuring out exactly what you can afford and what a bank may qualify you for saves a lot of headache as you go along looking for a place to buy. A good mortgage broker can tell you the maximum you would be able to qualify for and give you a really good idea of the kind of an offer a lender may wish to extend you.
There are a lot of variables - chief among them is your debt load and credit rating. Making $10,000 a month is not going to automatically qualify you for a mortgage for an amount you wish for, at a rate that is really low, for a term that makes absolutely no sense for the lender (say a 1 year term) and at low payments.
Then there is the question of your credit and the amount of down payment you may have. If your credit is bad, you aren’t getting a mortgage at a low rate. If you have anything less than 20% as down payment, you really are not in a good position to negotiate with the lender, especially in the current financial market.
And a little bit of patience and logic goes a long way. Think about it - would you really look to invest a large chunk of money, take a risk while doing so and expect little to nothing in return?
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