Mortgage rate shopping

[Wilson Feliciano]

So I'm now ready to start the pre-approval process to know what's my spending power as a first time home buyer. With rates going up in the last two years you could only imagine how scares it can be. What are things that I should be looking for when shopping for competitive mortgage rates? What fees are normal and which ones aren't? 

[Jaryn Pierson]

Quote from @Wilson Feliciano:

Thanks for the tips. When you say take 20% off ? Do you mean only use 240k out the 300k the lender is allowing me to barrow ? Or do you mean to I should offer a seller 20% less for the house they may be sailing me for 300k ?

 Great question. I'm talking more about your budget rather than talking down a seller. Essentially when you go to the bank they're going to work with you to figure out your 'maximum' purchase price. This essentially is the most expensive property they think you can afford. And generally, they often times will push you into buying something you maybe cannot afford or 'maybe can just barely if you squint at it the right way' afford.  In this market, if a bank told me lets say my maximum purchase price was going to be $200k for a duplex and that is taking the rental income into consideration, I'd just take 20% off of that and start looking for something that I could buy for roughly $160k. It isn't glamorous, but if you're early on a few base hits is a lot better than swinging for the fences and striking out.  Would I always say this, no. But right now with appreciation looking slow and assuming you're early on in your career its a great time to stay within your budget and to be patient and conservative.