As soon as the sales contract is signed, obtaining financing
for the new home becomes key for most buyers.
When most people think about choosing a mortgage lender,
they think about finding the lowest rate. Bear in mind that
mortgage packages consist of more than interest rates. They
consist of a quoted rate, plus origination fees, discount
points (prepaid interest assessed by the lender at
settlement) and other fees, plus a full range of terms
including adjustable versus fixed-rates, low down payment
versus high down payment, the presence or absence of
prepayment penalties, and many other features.
In addition to the financial considerations, you will want a
lender you can trust, a lender you can work with
effectively, and a lender who offers a wide range of
mortgage loan products. Here are three steps that can help
you shop for a mortgage.
Build a List of Lenders
Talk with your real estate agent. Real estate
professionals are normally in the best position to learn
about financing opportunities in the marketplace. Lenders
regularly call agents to alert them to financing packages.
Talk to people you know who have bought or refinanced a home
recently. Check the newspaper’s real estate or business
section. Look in the Yellow Pages under "Mortgages."
Finally, check out Web sites for lenders in your area. Many
sites include information on home loan programs, as well as
publish rates.
Talk to a Loan Officer
Call or visit the lenders on your list. Get a feel for what
it will be like to work with them and how they approach your
needs. You might want to ask for references – recent home
buyers like yourself – and talk to them. Here are some key
questions to ask lenders:
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What type of mortgage loan products do you offer?
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What are your rates? |
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What are the points? |
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What is your rate lock period? |
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What are your closing costs? |
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How long will it take to process my mortgage
application? |
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How long before I know if I have been approved for the
loan? |
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What documents do I have to provide? |
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What costs am I expected to pay? |
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Is a deposit required to make a loan application?
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Compare Rates for Similar Loans
Among the things you’ll want to discuss with prospective
lenders are the rates they offer on mortgages. When
comparing rates between lenders, be sure the rates are for
comparable loans and rate lock periods. Remember to include
fees and other costs so you’re comparing apples to apples.
Mortgage Rates
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