2. Offer accurate information."In order to efficiently navigate through a purchase transaction, a consumer needs to get prequalified and determine what he or she can purchase," says Jay Ralstin, a residential loan originator with Premier Bank in Tallahassee, Fla. Be honest about your income and expenses. "Your rate and fees are based on data," says Alex Castellanos, a governor for the Mortgage Bankers Association of Florida and a loan officer with SunTrust Mortgage in Miami. "If you give me accurate information, then it works. Be honest with yourself; figure out your expenses and your income." By doing so, the loan originator has a much easier time giving you an accurate depiction of your loan costs. That's important because the new GFE requires a three-day waiting period before closing on a loan if certain costs have changed and a new GFE has to be issued.
3. Use the shopping chart."This is a great tool for people to do a side-by-side comparison of all the key characteristics of the loan," says Sullivan. On Page 3 of the GFE, a chart allows you to compare four different loans for total cost. "You can go line-by-line and fill in the loan amount, loan term, interest rate and more to find out what each lender is charging," says Davis. In the past, most GFEs didn't specify this detailed information.
4. Look beyond the interest rate."You have to look at interest rate and then at fees," says Davis. "Just because a broker offers a lower interest rate than others doesn't mean it's the best deal if that particular broker is charging more in fees." The new GFE has one line for all settlement charges, rather than using 50 lines that could be duplicate charges called by different names.
And, don't forget service. "Sure, you'll see the interest rate and whether or not you have a prepayment penalty, but you won't see the intangibles," says David Doerr, a mortgage consultant with Wells Fargo Home Mortgage in Salt Lake City. "Will this loan officer give me the best service? Has he or she been in business for a long period?"
Castellanos agrees. "A loan officer who provides outstanding service will tell you everything you need to know, in layperson's terms, about the loan you choose, including whether or not there's a balloon payment or an adjustable interest rate. The new GFE only confirms that information."
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