Before shopping for a mortgage, there are several factors that you should take into consideration.When you first begin shopping, the process seems relatively simple, just compare rates and pick the lowest one. But, after several calls to lenders that may not ask all the qualifying questions, you begin to realize that comparing lenders may become a difficult task. In addition, you may be speaking to loan officers that are not thoroughly trained, and therefore provide wrong information. So where can you go to shop for the right mortgage? Do not worry! Shopping for a loan can be made simple. Read the article below, use the loan comparison sheet provided, and soon you will see how easy it is to get the best deal.
Before applying for a mortgage, you should decide which program you would like. We have simplified the process by offering the top 5 programs. Look through our Personalized Loan Advisor section for assistance in the selection of your mortgage. A mortgage is a major purchase, it is important to know that you have the right program for you.
Comparing what different mortgage brokers and lenders are charging you to get an interest rate is often the most difficult part of mortgage shopping. First make sure that you are comparing the interest rates on the same day. Rates change when the bond market changes, which occurs daily, if not a couple of times a day.
One of the difficulties in shopping for a mortgage is that lenders seem to have their own way of expressing costs. Compare total costs to get the loan. Get to the bottom line, and look at the GRAND TOTAL SUM of ALL costs before you compare the interest rates. We believe that you will find USA-Mortgage.com has the lowest cost mortgages anywhere.
For Example: For a loan amount of 100,000 on a 30 year fixed rate mortgage, ABC bank is offering you a rate of 8.375% with 0 points and 1% origination fee and $450 in lender fees. XYZ Bank offers you 8.5% on the same loan with 0 points and no origination fee, and $450 in lender fees. Both lenders are quoting a zero point loan. Which lender has the better deal? Lender XYZ probably has the better deal because paying origination fees is like paying “points”. You should most likely get a .25% improvement in the rate for a “point”. On the same day ask lender XYZ what it would cost to have 8.375% and then compare the total cost for both lenders to USA-Mortgage.com at that exact rate and lock period on our loan comparison sheet below. It is best to fix all lenders at one rate and lock period to compare the total costs to attain this rate and lock period on this particular day.
Fees can be broken into one or four categories:
- Appraisal/ Credit Report Fees or Application Fee – These are fees paid to companies other than your lender for services necessary to obtain your loan. In addition, some lenders may have “application fees”. If this is the case make sure this fee is either credited to you at closing or is used for your credit and appraisal report.
- Loan Origination and Points – An origination fee or point is 1% of your loan amount. By converting these fees to actual dollars, you can get a truer cost comparison. Some lenders quote zero point loans but charge an origination or broker point. USA-Mortgage does not charge any origination points and YOU always choose whether you pay any other points.
- Lender Charges – (i.e. underwriting, processing, document preparation, tax service, flood, etc.) These fees can vary significantly depending on your lender.
- Title Fees – These fees are paid directly to a title company. These fees include; title insurance, recording fees, closing fee, survey, termite, and attorney fees if applicable.
Lastly, watch out for lenders playing the short lock-in game, where they are quoting you rates on a 15 day lock. If the lock expires prior to you closing on your mortgage, you lose your lock. At USA-Mortgage, we quote all of our rates on 30, 45, and 60 day locks, to allow you plenty of time to get your mortgage closed.
All USA Mortgage rate quotes are based on 30 day locks by default, but we do offer 15, 45, 60, and even 90 day locks as well. Please ask your loan officer for details. All USA Mortgage programs require you have the ability to document your income.