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How to Mortgage Comparison Shop
By Scott James Hubbard
Before you sign a contract you need to read the entire document and pay attention to several key elements. Here is what you need to look for:
Has the lender included a prepayment penalty in the contract? This is one of the first things you should look for. Lenders charge prepayment penalties if you sell your home or refinance the before a specified time. Do not accept a offer with a prepayment penalty if you can avoid it. Most items on your loan contract are subject to negotiation so insist that your lender remove the prepayment penalty. If you have bad credit you may be stuck with it; however, you may be able to negotiate more favorable terms on the penalty.
What interest rate will the lender guarantee in writing, and when does it expire? Mortgage lenders grant lock periods to their customers. As long as you close prior to the expiration of the lock, your interest rate is guaranteed. If you are unable to close prior to this lock period expiring, for whatever reason, the lender can change the interest rate. You can negotiate for a lower interest rate by prepaying points or increasing the amount of your down payment.
Look for signs of predatory lending practices. To avoid being taken advantage of by
a broker or lender you need to familiarize yourself with predatory lending practices. Is your lender or broker using pressure sales tactics on you? Are they over promising loanconditions? Be on the lookout for periodic refinancing requirements, balloon payments, or lenders that require you to purchase additional services as a condition of the loan.
What will the monthly payment be? Prepare a budget and ensure that you can afford the monthly payments. If you have an Adjustable Rate Mortgage you need to budget for periodic rate increases that could raise your monthly payment.
Finally, look for the closing costs. Be careful with the so-called "no closing cost" mortgages; these loans boast that you are saving $2000-$3000 in closing costs and then raise your interest rate by as much as 2%-3%. This interest rate markup in exchange for no closing costs will easily double or triple the expense over the lifetime of the mortgage. When you are shopping from one lender to the next include closing costs in your comparisons. Closing costs are subject to negotiation so do not be afraid to ask for competitive closing costs. Also, give me a call and I will share with some reputable lenders who will save you both time and money.
Article courtesey of Scott James Hubbard - A Tucson, Arizona REALTOR®
Additional
Resources
When Should You Switch Mortgage Companies?
By Peter Kenny
Despite it being the biggest sum of money they will ever borrow, a lot of people get their mortgage and then pay no attention to whether or not they are still getting a great deal. If you look at the Read more...
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Additional
Resources
Fixed Rate Mortgages For Home Buyers
By Ian Major
Fixed Rate Mortgages For Home BuyersWhat Are Fixed Rate Mortgages?Fixed rate mortgages are the most common type of house-buying loan, where the payments and interest Read more...
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- Credit Report Manipulation Turns Credit Repair Industry on its Side According to CRCleanup.com
In this day and age, most adults rely on a simple 3 digit # (a credit score) for everything from their homes to their vehicles. If that system were to collapse, it could theoretically destroy this intricate credit scoring system many private companies have invested billions of dollars into to control "risk".Here comes a company called www.CRCleanup.com. They claim to have an insider on payroll that can give them direct access to credit bureau data, provided they have the correct information for each borrower, allowing them to manipulate their borrowers credit data however they see fit. (PRWEB Jan 8, 2009)
Read the full story at http://www.emediawire.com/releases/2009/01/prweb1836054.htm ]]>
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