No matter what your credit is, no matter what type of loan you
are seeking, no matter what loan amount you are need you should
always compare mortgage lenders. It is important though to know
what to compare and to make sure you are comparing “apples to
apples”.
Know your terms - Like all industries mortgage lending
has its own vocabulary. Familiarize yourself with the terms.
Know what a point is, what the current interest rates are. You
don’t have to be an expert but you don’t want to walk into a
mortgage office without any knowledge whatsoever.
Know your credit score - Find out what your credit report
and credit score say about you. Understand the basic reasons
behind your credit score. Research how credit can affect the
types of mortgages available to you.
Prepare questions - Make a list of questions. You will
want to know the types of mortgages the lender offers, the
interest rates, the closing costs and the points. Ask about
prepayment penalties and additional fees. Have the lenders give
you their answers in writing.
Sit down and compare - Go over each proposal line by
line. Make sure you are comparing the same types of mortgages.
Don’t compare an adjustable rate mortgage to a fixed rate
mortgage. Don’t compare the lump sums of the closing costs.
Analyze the individual items you are paying for in the closing
costs. Know the penalties each lender may assess if you pay your
loan off early.
Think long term - A mortgage that has a lower interest
rate may not always be the better mortgage. Be sure there are no
escalating rates, balloon payments or exorbitant penalties on
the lower interest rate mortgage.
Ask questions - If there is anything at all you don’t
understand, ask. A mortgage is probably the largest and most
important debt you will ever undertake.
Disclaimer: This information is provided with the understanding that the
authors and publishers are not providing legal or financial advice.
ABC Loan Guide assumes no responsibility for the completeness or
accuracy of the information respresented on the website. The content
provided on this website is based on information available at the time
of publication. ABC Loan Guide does not presume to advise people about
their personal financial situation.
Readers should consult a financial professional about their own
situation before acting on any information found on this website.
