Shopping for a Mortgage!

The first step to shopping for a mortgage online?
Decide the Mortgage Features You Want: You can't compare prices of different loan providers accurately unless you can specify exactly what you are shopping for. When you shop for an automobile, you decide beforehand that you want, e.g., a 4-door Toyota Corolla with Bose speaker system, red trim, etc., etc. Similarly, when you shop for a mortgage, you must know the type of mortgage you want - whether fixed-rate (FRM) or adjustable-rate (ARM), and if it is an ARM loan...... what kind? You must also know your preferred term, points, down payment, lock period and options, including interest-only, prepayment penalty and waiver of escrows.

Your mortgage broker will be able to offer you more loan programs from many different lenders when compared to a local bank. Your local bank can only offer there in house loan programs in comparison to the brokers ability to add new lenders with the newest loan programs. To ensure you have the widest selection of loan programs to choose from choose a mortgage broker.

One key factor in determining which loan program to choose is knowing how long you've determined you will stay in the home you are buying.

Always get quotes from 2-3 different mortgage professionals. This will allow you to make sure you are getting a deal that you feel comforable with. If a couple of quotes are close but one seems to have a 1/8% lower rate or the closing costs appear a couple hundred dollars cheaper don't immediately go through with the cheaper deal. Closing costs can be calculated slightly differently, and the cheaper deal initially may not be the cheaper deal in the end. At this point I highly recommend going with the mortgage professional that you feel more comfortable with. Remember the old saying "you get what you pay for". Going with the absolute cheapest is not always the best. The mortgage professional who returns all of your calls (when he/she says they will), is completely knowlegable about your mortgage loan and all of the details and you feel you can trust should be the final decision maker for you.

Always request and be sure to recieve a copy of a Good Faith Estimate (GFE) from your mortgage broker. This estimate will let you see upfront the fees you will be charged and the interest rate you will be recieving.

Never forget that the integrity and straightforwardness of the mortgage professional with whom you are dealing is paramount! Always make sure you are dealing with someone who is properly licensed, experienced and has a good reputation. Ask for the names of one or two previous clients for reference.

Disclose all relevant financial information to your mortgage broker. Mortgage professionals are not there to judge your spending habits and how much you make. Rather, they are there to help you achieve homeownership within your financial means. If you are in any situation in which limits your ability to afford a mortgage, tell your mortgage professional. He can often structure a combination of loan programs to help.

Shopping around for a home loan or mortgage will help you to get the best financing deal. A mortgage, whether it’s a home purchase, a refinancing, or a home equity loan is a product, just like a car, so the price and terms may be negotiable. Shopping and comparing may save you thousands of dollars. Brokers can shop for you.

When shopping for a mortgage on line use a site that allows you to choose the lenders or mortgage brokers that your information will be sent to. Applying directly to the lender/brokers site will help you to avoid being inundated with phone calls from websites that sell your information.

This is why it is important to "shop" for your mortgage with lenders on the very same day. Key factors can see mortgage rates changed several times in a given week, sometimes in the same day. The lender that you get a rate from on Monday may not be able to give you the same rate on Wednesday.

Besides getting a copy of the GFE, it is also a god idea to get a copy of the truth-in-lending (TIL). The TIL will show the total costs of the loan to you in the form of an interest rate, your annual percentage rate (APR). Remember the APR is not your actual interest rate that your payments are based off of. The other terms of the loan will also be on the TIL. It will have your loan amount, amortization period, and whether or not there is a prepayment penalty. The TIL is a good way to compare different programs and lenders very quickly and efficiently.

Keep in mind that a good Mortgage Broker can do all of the shopping for you. This will eliminate most of the unwanted telephone calls associated with so-called "rate shopping" websites. Many of these sites sell your personal information to the highest bidders and often lead to headache and confusion rather than lower rates.

Mortgage brokers do not lend money but instead distribute mortgage money through wholesale lines of credit given by the largest mortgage banks in the country. They are independent contractors who offer the loan products of multiple lenders, called wholesalers.

When shopping for a mortgage the first step should be to make sure your credit score is the best it can be because credit scores are a major factor in determining what programs and interest rates you qualify for. Borrower should make sure there are no errors bringing their credit score down. Also, they should determine if they could improve their score by paying down or paying off some debts.

Shopping for a mortgage can be difficult because there are so many mortgage products available and costs involved with the transaction. Try to limit your search to a couple of loan products, and get a detailed list of costs. Also, search on the same day because rates can change daily.

» DISCLAIMER: The information contained in this article on 'Shopping for a Mortgage!' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.