What The Bank Won T Tell You About Your Home Mortgage Quote

What The Bank Won T Tell You About Your Home Mortgage Quote

What the​ bank won't tell you​ about your home mortgage quote
Shopping for a​ house is​ probably the​ most significant financial decision that you​ will make in​ your life .​
When you​ shop for your home by first attaining a​ home mortgage quote,​ your decision becomes even more momentous—you need to​ perform a​ balancing act between the​ house of​ your dreams and factors such as​ the​ down payment and interest rate payable .​
Your first stop in​ this process will probably be your bank .​
This is​ the​ most obvious option,​ but may not always be the​ right one; there are things your banker will not tell you​ about a​ home mortgage quote .​
In other words,​ the​ home mortgage quote that is​ good for your banker may not be the​ best one for you.
Prevailing interest rates
Take the​ issue of​ interest rates .​
Rates fluctuate according to​ market exigencies .​
When you​ start your negotiations for a​ home mortgage quote,​ the​ interest rate might be higher than at​ the​ time you​ actually avail the​ loan .​
You must keep a​ track of​ such fluctuations,​ and induce the​ bank to​ provide you​ with the​ advantage of​ the​ prevailing rate .​
Your lender may not tell you​ this,​ but the​ difference could mean several hundred extra dollars .​
Therefore,​ it​ is​ always a​ good practice to​ consider alternative information sources before finalizing the​ home mortgage quote,​ and then compare rates on​ offer .​
With easy access to​ the​ Internet,​ you​ can even generate online quotes from web sites .​
This exercise will help you​ prepare well for negotiating with your banker regarding the​ interest rate.
Mortgage tenure
The mortgage tenure is​ another important question that you​ need to​ query .​
From the​ point of​ view of​ the​ bank,​ a​ 30-year fixed rate is​ most suitable because it​ can bring in​ returns of​ up to​ 4-5 percent for the​ bank .​
However,​ is​ it​ good for you? If you​ are looking to​ refinance in​ a​ period of​ about seven years,​ a​ 30-year rate is​ a​ disadvantage because you​ would be keeping the​ loan for only seven years.
Hidden fees and levies
Once you​ have finalized the​ purchase of​ the​ house and the​ interest rate with the​ bank,​ you​ would think that getting the​ right home mortgage quote is​ guaranteed .​
However,​ you​ need to​ watch out for those hidden fees or​ add-ons,​ which your banker might not have explained at​ the​ outset: loan processing fees,​ warranties,​ insurance,​ and the​ like .​
It always pays to​ put these issues on​ the​ table before finalizing the​ home mortgage quote.
Disproportionate service charges
In your market research for the​ right home mortgage quote,​ your focus is​ obviously the​ lowest interest rate .​
However,​ this should not be your only guide because some banks attract customers with the​ offer of​ a​ low rate,​ but may levy charges for services that are non-existent .​
a​ real-world experience is​ of​ a​ Fairfield,​ Conn.,​ graphic designer who discovered that his bank charges fees for services such as​ lender inspection and notary at​ a​ rate much higher than normally acceptable .​
It is​ a​ prudent step to​ compare the​ complete fee package before committing to​ a​ quote .​
It is​ important to​ remember that lenders often offer to​ waive a​ particular fee levied by your bank in​ an​ effort to​ close the​ deal .​
So,​ it​ is​ important to​ recognize such opportunities and press home the​ advantage .​

Besides raising these factors,​ you​ must also consider issues that are more closely related to​ your personal decision-making capacity,​ and for which no banker can tender advice:
• Be sure of​ the​ reasons for buying a​ house .​
• Ensure that the​ size of​ the​ house is​ right for you​ .​
• Choose the​ right time in​ the​ year to​ buy a​ house (there could be a​ particular time in​ the​ year when home prices drop,​ depending upon your location).
• If you​ decide to​ involve a​ real estate agent in​ procuring your home mortgage quote,​ find the​ right estate agent and be aware of​ his/her commissions.
• Select the​ location of​ the​ house carefully keeping in​ mind resale value.
• Inspect the​ house thoroughly,​ identifying problem areas and factoring them into the​ price.
Getting a​ home mortgage rate that suits your requirement is​ one aspect,​ living with it​ is​ another .​
However,​ once you​ have understood the​ operating market forces in​ this arena,​ you​ will go a​ long way toward successful management of​ both these aspects.

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