When it is time to find a mortgage company to buy your house, you may find that it is difficult to know which one may be the best for your situation. There certainly are plenty of options to choose from, and here is a look at how to choose the best mortgage to match your need.
Learn What Mortgage Rates Are Available First
BankRate.com suggests that you start by finding out what kind of mortgages and rates are available. Be sure that you understand the difference between adjustable rate mortgages and fixed rate mortgages, before you start says FreddieMac.com, so that you aren’t sold something that is not in your best interest. You can easily do this online.
The FDIC encourages you to learn about all of the costs involved with each lender’s mortgages, including interest rates, whether it is for a fixed rate or adjustable mortgage, points, fees, requirements for down payments and private mortgage insurance. When you understand and have prices for all of the above, it enables you to compare better, seeing which deal truly is the best one. It also will give you an idea of what is average, allowing you to be able to compare better when you actually start to approach lenders.
Then, with those interest rates and data in your hand, go to the banks and lenders where you have various accounts, such as checking or savings. Discuss with them what terms they can give you and determine whether or not they can give you a better deal.
Negotiate with Lenders
When you have the statistics in your hand, it is easier to get lenders to adjust their figures so that they can get the loan deal from you. Show them the hard facts, and see if they are willing to compromise on some of the numbers. Be sure to watch out, though, that when they lower one figure that they do not raise another one. Read over the mortgage agreement carefully.
A Mortgage Broker May Be Able to Help
A mortgage broker is an agent who will work with several companies and try to offer you the best deal. You need to realize, though, that a mortgage broker only deals with certain companies, and, in some cases, may also be a lender. According to Credit.com, a broker can offer you wholesale prices on a mortgage, whereas, a lender can only give you retail rates. A broker will, however, often add their own fees to bring it up close to retail prices.
Check Out the Character and Reputation of the Lender
It is important that you check out the reputation of a lender you are thinking about doing business with. This is the most important thing you need to know, says Credit.com, because many lenders will lie to you over the phone. It seems that although there are laws to protect consumers against certain types of problems, there really is little enforcement taking place. This has resulted in a lot of misleading in this market.
One of the best ways to find trustworthy companies is to get referrals from friends. Ask them if there were any surprises at the closing table in the way of hidden fees, or unexpected ones. Also ask if the rate was locked in as promised.