Choosing the right mortgage lender or broker for your situation is a difficult decision; choosing the wrong loan terms could cost you thousands of dollars. Here are several points to consider before signing on the dotted line for your mortgage loan. What is the Interest Rate? This may seem an obvious question; however, many homeowners neglect to lock in exact numbers. Make sure the rate you lock in is the rate promised you. If your mortgage is a combo loan pay close attention to the interest rate of the second mortgage and lock that rate in as well. Negotiate with your lender or broker for the lowest interest rate you can qualify; make sure that you get this interest rate guaranteed in writing. Does the Mortgage Have a Pre-Payment Penalty? This should be one of the first questions you ask. Make sure the mortgage you consider does not have this penalty for early repayment. If your credit is poor there may be no way around it; however, negotiate for the shortest penalty possible. Try and talk the mortgage lender down to a period not longer than six months. If you are dealing with a mortgage broker make sure you are clear on all aspects of this penalty; many brokers conveniently forget to mention the mortgages they offer feature prepayment penalties. Beware Pushy Brokers and Mortgage Lenders If you think the mortgage broker or lender is trying to pressure you into a mortgage, the loan they are pushing may not be best for you. Dont fall for the hard sell from your lender or broker. These tactics are employed by predatory lenders with the goal of taking your home from you. What are the Exact Closing Costs? Many homeowners overlook closing costs when comparing loan offers. These homeowners overpay at closing. Make sure the closing costs you agree to are competitive by comparison shopping from a variety of mortgage lenders and brokers. Dont be afraid to negotiate closing costs if the rates you receive are not competitive. You can learn more about your mortgage options, including common mortgage mistakes to avoid, by registering for a free mortgage guidebook. |
