Choosing The Right Mortgage

Choosing the​ Right Mortgage
Remember you​ would not buy the​ first house that was offered to​ you,​ so why go with the​ only mortgage that is​ offered to​ you​ .​
Ask for more than one good faith quotes .​
See what options different lenders will give you​ .​
Be sure to​ ask the​ lender to​ not pull your credit report,​ but to​ give you​ a​ good faith quote based on​ the​ paper credit report you​ will have brought to​ him.
Understand what your credit report says .​
And don’t order your credit report online .​
Most people order their credit report on​ the​ internet,​ sometimes they even get their free report .​
What they don’t realize is​ that by doing this,​ they worsen their credit history because when your credit score is​ pulled more than once,​ your score will lower .​
And it​ will be pulled more than once if​ you​ pull it​ and then the​ mortgage company pulls it​ again .​
Instead what you​ should do is​ order your credit report through the​ credit bureaus by calling their 1-800 numbers .​
Be careful,​ because they will try to​ tell you​ to​ obtain in​ on​ the​ internet,​ be patient,​ stay on​ the​ line and ask for a​ written copy .​
This copy will be your true credit report .​
This is​ what will actually be pulled up by the​ mortgage company.
Consider using a​ mortgage broker .​
Sure you​ will have to​ pay an​ additional fee,​ but in​ many instances that fee will be worth it​ when you​ get the​ right type of​ mortgage loan .​
a​ mortgage broker will help find you​ several loan options to​ choose from .​
You can then choose the​ option that best suits your needs.
When you​ go to​ a​ mortgage broker or​ a​ bank make sure that the​ bank or​ mortgage broker does not sell you​ a​ higher interest rate than what you​ qualify for .​
Many banks will pay a​ broker to​ sell his customer a​ higher mortgage rate .​
This is​ called Yied Spread Premium or​ YSP .​
So if​ you​ qualify for a​ 6% interest loan but your broker or​ bank is​ selling you​ a​ loan with an​ interest rat of​ 6.5% then the​ bank is​ making more money .​
Look for a​ line on​ your documents one that’s says YSP .​
If it​ is​ positive that means that you​ are not getting the​ lowest interest rate you​ qualify for.
How do you​ Avoid This?
Be upfront with your broker or​ banker,​ and negotiate .​
If you​ negotiated the​ price of​ your home,​ you​ can definitely negotiate your mortgage .​
Every fee on​ the​ mortgage is​ negotiable .​
The only thing you​ cannot negotiate on​ are the​ taxes,​ the​ filing and the​ insurance fees .​
Before deciding,​ get a​ copy of​ your good faith estimate,​ take it​ home and start investigating all the​ fees the​ bank or​ broker is​ trying to​ collect .​
Explain to​ him,​ what you​ have found out .​
You will soon learn that he changes things pretty fast .​
When you​ use a​ broker tell him that you​ are willing to​ pay up to​ a​ half point in​ origination fees,​ but that you​ don’t expect to​ pay an​ back end fees .​
He will understand what you​ are talking about.
Finally read your closing documents very carefully .​
In fact you​ should ask an​ attorney to​ be present .​
It is​ always better to​ be safer than sorry later .​
It is​ better to​ spend a​ few hundred dollars to​ consult an​ attorney now,​ and not find out later that you​ are spending thousands of​ dollars paying what you​ should not have to​ .​
Many brokers and banks feel somewhat uncomfortable and too time consuming .​
Generally speaking and in​ most cases the​ attorney does not find anything wrong with the​ closing arrangements .​
But you​ know the​ principles of​ Murphy’s law .​
Something may go wrong if​ you​ don’t do things the​ right way.
In this type of​ arrangement it​ is​ not wise to​ penny pinch .​
In fact be sure to​ always have a​ home inspection done .​
If you​ don’t do things you​ will regret it .​
It is​ always best to​ have spent a​ few hundred dollars up front .​
But what you​ want to​ avoid is​ having something BIG go wrong halfway down the​ loan.

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