You must ask certain questions when you're looking for a mortgage lender. Don't just start calling lenders and asking for their rate. Rather than finding the best loan package for your situation, you're likely to end up with a really great sales person.
You can ask a friend or relative or if you already have a Realtor, ask them. But make sure you also ask why they prefer this particular lender over others? You will probably get a lot of recommendations, however, you obviously can't work with all of them (you can however have them compete for your business). Use the following questions to narrow down the list and select the lender or mortgage broker that best meets your needs.
Some things you need to look for are:
What type of loan products does their company offer and how long has the person been in the mortgage industry?
How to they determine the interest rate and what rates are currently being offered?
Are you able to break the rate lock if rates improve?
Are closing costs figures guaranteed?
Are they interested in your particular financial situation and goals or just closing the deal? A reputable lender will try to find out all about you before they start talking particular loan packages.
Will the lender continue to service your loan over it's life or will they sell if off to another company?
When will they kick in?
Are there discount points and origination fees?
Do they approve their own loans in-house?
You can shop for loans online but beware that the promise of one-stop loan shopping comes with a reputation of bait and switch on rates and fees. It can be time consuming to research several lenders, but it's well worth the time you'll invest if you can find the best loan package for you. Watch for sites that ask for your Social Security number up front. They may pull your credit report and that could hurt your credit score if you don't end up getting a mortgage.
Once you have a lender, get preapproved. Preapproval can actually make the home shopping experience much more enjoyable and less stressful since you will:
Save time and frustration by looking only at homes that are in your price range
Take more time to examine the homes you are looking at. You will have more time to determine if that garage is really large enough or if the yard is big enough for your dog and your kids to enjoy.
Skip the frustration of shopping above your price range, having your heart set on a home, only to find out that you can't qualify for the loan after all.
You can negotiate the price knowing that you have the loan in place
Your escrow will be shorter.
A home purchase is probably the single largest purchase you will make. The financing costs can exceed the actual price of the home. This makes it critical to find the best lender and loan package for your financial situation. It will take some legwork and research on your part, but it's absolutely essential if you want to get the most for your money.
Find a mortgage lender like GMAC Mortgage that fits your needs and then go shopping! Start at Brookfield Homes in San Diego.
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