Five Steps to a Great Mortgage Deal

Shopping around for a home loan will help you get the best financing deal. A mortgage is a product, so why not apply the same tactics you use before you make any other major purchase? The cost of a mortgage depends on your credit history, and involves rates, points, fees, private mortgage insurance, and other factors, so it’s best to compare, compare, compare.

You need to get your financial house in order before you apply for any type of loan. The first step: Get a free copy of your credit report. Visit www.annualcreditreport.com or call (877) 322-8228. Review your report for accuracy and completeness before you apply for a loan. If you find inaccurate information, contact the credit reporting company and the information provider.

Second: Check your local newspaper and the Internet when you start shopping for a loan. You usually can find information on both interest rates and points for several lenders. Check often: rates and points can change daily. Your newspaper won’t list the fees, though, so ask the lenders about those.

Third: Shop multiple lenders. Compare rates and fees and read lender reviews to find the best loan for your circumstances. Figure out how much of a down payment you can safely afford, and find out all the costs involved in the loan. Knowing just the amount of the monthly payment or the interest rate isn’t enough. Get information about the same loan amount, loan term, and type of loan from each potential lender so that you can compare “apples to apples.” Use the Mortgage Shopping worksheet and online mortgage calculators to help you estimate monthly mortgage payments for various loan amounts, interest rates, fees, taxes, and insurance costs.

Fourth: Once you know what each lender has to offer, negotiate the best deal that you can. On any given day, lenders may offer different prices for the same loan terms to different people, even if those people seem to have the same qualifications. The most likely reason for this difference in price is that loan officers and brokers are often allowed to keep some or all of this difference as extra compensation. Don’t be shy or embarrassed: there’s no harm in asking lenders for better terms than the ones they quoted originally or than those you found elsewhere.

Fifth: Once you’re satisfied with the terms, think about getting a written lock-in from the lender. It should include the rate you agreed on, the period the lock-in lasts, and the number of points to be paid. The lender may charge a fee for locking in the loan rate that may be refundable at closing. Lock-ins can protect you from rate increases while your loan is processed; but know that if rates fall, you could end up with a less-favorable rate. If that happens, try to negotiate a compromise with the lender or broker.

Your home is likely the biggest purchase you’ll ever make. A little research, comparison shopping, and negotiating can go a long way toward getting the best deal available. Good luck  shopping for your home loan!

Comments

Wells Fargo stole my (late) husbands ID how do you explain that away created a fraudulent mortgage note that was submitted to Fannie Mae in 2005 (husband died in 1998) with a fake address on it. DO NOT TRUST THE BANKS at all

Wells Fargo is charging me over 4,500 dollars in late fees for a missed payment in 2005 on an account that was included in a bankruptcy in 2006! WOW!!!!!!!

When shopping for mortgage ask hard questions about what company will be servicing it. Get a commitment from your lender in writing if possible. GMAC went bankrupt and Green Tree took over the servicing of their mortgages. They are nightmare. We paid off our mortgage early. Now they send us a threat "This communication is from a debt collector. It is an attempt to collect a debt, and my information obtained will be used for that purpose." That is absolutely absurd and uncalled for. Please shut down this company. I can't imagine what they'd do if we were under financial duress. Businesses like this have no place in the USA. Threatening people in every communication should be against the law. We have done everything 100% correctly. Our credit rating was in the top 5%, but I must check it tonight due to Green Tree LLC's letter from their Rapid City, SD office.

Seems like there are several companies in Rapid City doing this same thing. I got into a similar sitiation a fewl years ago with a company in Rapid City that purchased a loan I had and never notified me of the change. I had payments automatically sent from my bank account to the first lended but by the time they received and forwarded the e-check it was late and the lender now wanted late payments plus percent increase.

I noted this on my credit report from Experian, but like you it stayed on my.credit report as a negetive for seven years. Bad business coming out of Rapid City, FTC needs to locate and prossacute these lenders. Probably an indian tribe using casino money.

The RACIST comment, "Probably an indian tribe using casino money." IS RIDICULOUS....Just like your inability to spell correctly.

Why should "Bad business" be blamed on a race? Who do we blame for your spelling education?

Leave a Comment

Comment Policy

Read Our Privacy Act Statement

It is your choice whether to submit a comment. If you do, you must create a user name, or we will not post your comment. The Federal Trade Commission Act authorizes this information collection for purposes of managing online comments. Comments and user names are part of the Federal Trade Commission’s (FTC) public records system, and user names also are part of the FTC’s computer user records system. We may routinely use these records as described in the FTC’s Privacy Act system notices. For more information on how the FTC handles information that we collect, please read our privacy policy.