In order to get the a lowest rate on a mortgage follow these important tips:
- Shop around! There are 1,000 of mortgage companies doing business in the US today. By spending some time comparing rates, fees and services, you may be able to save yourself thousands of dollars by avoiding loans with high rates and fees. Get a quote now by completing an online application.
- Compare interest rates. Market rates for borrowers change all the time. Your credit score will dictate the interest rate you will pay for a mortgage. Click here for a free credit report.
- Compare interest rates, fees and find out of the mortgage programs being offered have any prepayment penalties. Origination fees seem to be about 1% of the loan amount. Some unsuspecting and uninformed consumers have paid as high as 17% for origination/broker fees. If you have poor credit, you will likely have to pay higher rates and fees then people with good credit because you’re in a high risk category.
- Common sense. Avoid companies which encourage you to commit fraud by claiming a business purpose for a loan which is actually for personal or family use. This seems to be done by some companies to avoid a rescission period and/or to circumvent the requirement to provide important disclosures. If you have a financial emergency, like imminent foreclosure, you may waive your right of rescission to speed up the process without deceit.
- Beware of no cost loans. Some mortgage companies use that expression to mean no out of pocket costs at closing. You do, however, still pay for the loan. Your closing costs are added to your loan balance. Make sure you understand all the fees you are paying, regardless if they are added to the loan or not.
- Refinancing too often. Every time you refinance your mortgage you incur closing costs and non-refundable fees. Many factors should go into your decision to refinance. Make sure the interest rate adjustment out weighs the costs of the refinance.
- Good Faith Estimate Once you’ve applied for a mortgage loan, make sure you get a Good Faith Estimate of costs. Mortgage companies are required by federal law to provide you with one. Make sure you understand and are willing to pay all of the fees listed. Take the Good Faith Estimate with you to the loan closing and compare it with the Settlement Statement. Look at every item to make sure that the actual fees match. If there are any significant differences, get them resolved before you sign the papers.