Getting a mortgage loan can be a scary thing for a new homebuyer. It can be difficult and tricky to work through the details and come out on top. These tips should help you navigate the process.
1. Shop all around. There are thousands of companies in your state that are operating as mortgage lenders or mortgage brokers. If you spend some time comparing their rates, services, and fee, you could save yourself a lot of money by staying away from loans that have high fees and high rates.
2. Look at different interest rates when you’re shopping too. Look at both variable and fixed rates. Look at the fees, and you should also check to see if they have prepayment penalties. The rate in the market for people with excellent credit is going to vary at different times. If you believe that your rates are going to go up, then you might want to lock in your rate. You should get a confirmation in writing of a lock-in, and you keep aware of the time that the lock is going to expire.
3. Stay away from companies that tell you to commit fraud by saying that you have a loan with a business reason which is really just a personal, household, or family loan. This is sometimes done by companies to sidestep the rescission period, or to skirt the obligation to have serious disclosures. If there is some financial emergency, like an upcoming foreclosure, you might want to get rid of your right to rescission to catalyze the procedure without deceit.
4. Stay away from companies that have statements like “no cost to you”. A minority of mortgage loan companies employ that phrase to mean that you have no out-of-pocket expenses at closing. Basically, they will tack on closing costs to the loan balance instead of requiring you give money at closing. Make sure that you’re aware of all the fees you’re paying, whether they are tacked onto the loan or not, it is all in your power to determine if you’re getting a fair deal or not.
5. Don’t churn the mortgage loan that you are going to get. Usually, every time you do a refinancing, you take on costs and fees that are non-refundable. Don’t enable a mortgage lender or mortgage broker to swindle you into a mortgage rewrite on a mortgage loan just so that you can get a tiny bit of cash out. Most people discover that they have $5,000 added onto their debt just to get $2,000.
These mortgage loan tips should help save you money and get a better deal. Beware of unscrupulous companies. More importantly, beware of unscrupulous practices by big companies. The latter is more common so stay on top of the mortgage lender market in your state. Only go with companies that are properly evaluated and rated and never choose a company that you know nothing about or has a bad track record as far as the kind of actions that have been taken against them in the past. Don’t get caught up in a bad mortgage deal.