Steps to get the Best Mortgage Deals

 

We often come across customers who ask if there was a secret to getting the best mortgage rate? What the cheapest mortgage rate? We have put together a few principles to getting the best real estate mortgage deals. We say "best mortgage deal" instead of "best mortgage rates" because its not just about the lowest rate. A lender can advertise a really low mortgage rate and then charge a hefty fee on the backend to make up for it. What good is that? So the best mortgage deal is one that balances between the lowest mortgage rate with the lowest possible fees.

 

Difference between a direct lender and a Mortgage broker

Mortgage brokers usually represent several lending sources as opposed to direct lenders who are a single lending source. Brokers act as intermediaries between you and several lenders. Direct lenders are typically licensed to lend funds in all 50 states whereas brokers may only be licensed in a handful of states.

In alot of cases, direct lenders have more strict guidelines. If you don't pass, tough luck. With a broker, he or she will be aware of the different guidelines from different lenders and can guide you in the direction that best fits your situation. Even if you do not qualify for one lender, the broker may have alternatives for you.

 

Steps To Find the Best Morgage Deal and Low Mortage Rates

1) shop around for reputable local mortgage brokers
Brokers have access to several competing lenders. There is a misconception that a mortgage broker will charge higher fees. NOT true. Surprisingly most of the time their fees are less then a direct lender. They may have less overhead and might be able to underwrite the loan in house, etc.

Not all mortgage brokers are equal. Some may charge more then others so make sure you get 2-4 and let them know you are trying to find the best mortgage deal and lowest mortgage rate before running a credit check.

Use the form below to find competitive rates from lenders in your local area.

 

2) Ask for a Good Faith Estimate BEFORE getting your credit run or handing over any money
Some will give you straight forward answers and some will beat around the bush. They may give you answers like the best rate depends on what your credit score is. In this case, just ask for a couple of estimates base on a couple of scores. What will the number be for a 650 score? what about 730?

You should be able to see all their fees in the estimate. The lenders fees are usually on top of page 2 of the HUD statement.

If you are not sure where you stand on your credit and would like a free credit report, there are companies that offer 1 free credit report per year. Use the form below to get a free credit report.

What’s Your Credit Score?

 

3) Compare Mortgage fees and rates for each mortgage broker to get the best mortgage deal.

Make sure you compare apples to apples. Compare a few estimates for same credit score category.

4) Watch out for points.

Almost another name for "fees." Points are nothing more then interest they charge you upfront. They may advertise a low mortgate rate, but then tack on a few points on the backend. Depending on how much you are borrowing, these can add up to thousands of dollars. If you are not planning on staying in the house for more then 5 years, it is not advisable to pay for points.

5) Like any business, these fees are sometimes negotiable. I've even negotiate title fees in addition to mortgage fees.

6) Make a decision, run your credit report, and proceed with the best possible mortgage deal.

Thats it, there no real big secret. Only hidden fees and points for those who are not familar with the loan process. But if you follow the above steps you are certain to get the best mortgage deal and possibliy the lowest mortgage rate for your situation.

 

Steps To Find the Best Morgage Deal on a Refinance - NO COST REFINANCE

1) IF you are refinancing, make sure your existing mortgage company is aware your intention. Alot of times they may have a streamline refiance program themselves that may help you save time and money.

2) Make sure you consider any CLOSING cost on a refiance if any. Depending how long you plan to keep the property, the extra closing cost may not be worth the trouble. I always approach a lender asking for a total no cost refinance. Make sure they do NOT roll the cost into the loan. Cost such as lenders fees on top of page 2 of the HUD-1 statement. The prepaids - interest, taxes, insurance are expected and you can't get around those.

3) Of course if there is not a NO COST refinance program available, go for the lowest cost. Make sure you get quotes from several lenders/brokers.