For most would-be borrowers, the challenge
is not in finding a mortgage lender, but in sorting
through the throngs of banks, online lenders, mortgage
brokers and others eager to take your loan application.
How do you choose which one will offer you the best
deal, and competent customer service to boot?
Cut through the thicket by shopping
broadly and then narrowing your focus as you learn
more about what type of lending environment makes
you most comfortable. Begin to familiarize yourself
with various lenders and the deals they're offering
by browsing around the mortgage
rate tables on Bankrate.com.
Then take your shopping a step further.
Go to the bank or credit union where you already have
a checking or savings account and ask what types of
mortgage deals they offer current customers. And be
sure to ask friends and family members for referrals
to loan officers and mortgage brokers who gave them
good, professional service and helped them find the
most competitive loans.
Always keep in mind that, not only are
you buying a home, you are buying a very expensive
financial product -- a mortgage loan. In fact, if
you were to take out a mortgage for $300,000, at 6.25
percent interest and keep that loan for the full 30
years, you would end up spending nearly $365,000 in
interest alone! You deserve to be treated as a very
special customer when you're spending that kind of
money.
DIY or hire a broker?
One important decision will be whether to pursue a
mortgage on your own or to use the services of a mortgage
broker. While a good mortgage broker can shop your
loan among several lenders, it's important to understand
that brokers don't have special access to deals that
are unavailable elsewhere. And a broker is not obligated
to find the deal that is best for you. Some have been
known to pair a borrower with the mortgage that offers
the broker the greatest profit, instead of the lowest
cost to the borrower.
Before working with a broker, take the
time to talk with two or three of that broker's most
recent clients. Ask if they received the same type
of loan the broker promised, if the costs were in
line with their expectations, if interest-rate lock-ins
were obtained without delay and if the closing was
smooth and on time. Even if you decide to work with
a mortgage broker, your time spent shopping other
lenders will help you judge whether the product the
broker comes up with is indeed the best deal for you.
| -- Posted: March 19, 2007 |
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