What to know when shopping for a mortgage
MACON, Ga. -- Mortgage experts say it's more affordable to buy than rent right now.
Interest rates for buyers are still low which, for first time home buyers, can lead to many different options.
First-time home buyer Bryan Jones said the process can be overwhelming without guidance.
"Looking at the mortgage and trying to decide what all the numbers and everything means was very confusing and stressful," he said.
Ultimately, he and his wife chose a mortgage broker they trusted to help guide them through the process. Jones said that having that person to handle the process helped.
"Our broker made it really easy," he said. "She explained everything and put us at ease, but there was definitely some stress at points."
The Joneses went with a fixed mortgage rate that stays the same year to year, but other first-time home buyers may go with a riskier option, a variable interest rate that may change year to year based on the economic environment.
"When the interest rate environment is high, that's when you don't want to do a variable interest rate," said Colleen Giffin, the vice president of Beall Financial. "When the interest rate is low, variable interest rates are much more favorable."
Giffin said there is a chance you could pay less with a variable rate.
"Your payment is going to change, and it's going to go up or down with that interest rate," she said.
But she warned that a variable rate could also go way up. And if you can't pay your mortgage, your interest rate could balloon, causing you to owe more on your house than you originally did.
Giffin said the best practice when shopping for a mortgage is to shop around.
"That good faith estimate is what you can use to shop around," she said. "You want to talk to different banks, you want to talk to different mortgage companies, you want to talk to credit unions."
Giffin said you shouldn't let a bank run a hard credit check on you when you first start looking for a mortgage broker because that can affect the mortgage estimate and hurt your credit.
A good faith estimate based on a soft credit score will still give you an idea of what different banks have to offer.