Today’s article is a pretty interesting topic on how to shop for a mortgage. I thought it would be a good topic because of the housing market, the refinance market being hot and unfortunately too many people go in with preconceived ideas about mortgages and as a result, they don’t always end up with the best loan for them. So how should you shop for a mortgage and I’d like to actually start with?
The Assumptions and Questions When Shopping For Mortgages
I think there are three common assumptions or questions that that people have, and this is going to be more fun than shopping for a car. Yes, it certainly should be, although both can seem very tiring at the time, but because both are very important decisions that people are making so that actually makes it more important to shop absolutely.
- So, I think the common questions or assumptions are our banks better than non-banking lenders to get for mortgage non-banking members, meaning they don’t have retail outlets but they’re simply wholesale lenders that only do mortgages. The second question is our credit unions better than either banks or non-banking lenders, and the third is that I think it is a very common assumption if I have money in a bank even a lot of it; I’m going to get a better deal or better treatment. I think a lot of people make those assumptions, so before you make any of those assumptions, the first thing you should always do when you get going for a mortgage is to check out other lenders and see what programs they have. Don’t ever assume the first offer you’re getting is likely to be your best offer.
- That being said, second in my opinion is a wholesale lender having a great advantage over retail banks, because doing mortgage lending is their entire focus. They are not distracted by commercial lending or by you know savings account checking accounts in other situations, so all of their energies are going towards doing the best mortgage loan.
- The third thing is having money in a bank actually gives you no advantage whatsoever, because literally, the entities that do wholesale lending versus retail banking are completely different in the bank and bottom line. All the mortgages end up getting sold in the same secondary market or wholesale investors that do the buying. See more.
So how do you shop for a mortgage?
Well, unfortunately, you really can’t shop for a mortgage by line item saying I’m going to this lender, and these are the charges they’re showing and that’s because the banking laws set up today do not require banks or banking entities to provide full disclosure of what all the fees and costs are, not even what all the rebate is, so you can’t really just say this lender is charging me this versus you’re charging me this because they won’t match up in almost any of the cases unless you’re doing two mortgage brokers against each other, they are not going to like that.
Go to the Bottom Line
What is the rate you’re getting and that they are quoting you? What are the closing costs and by that I don’t mean including the escrow accounts, because those are not considered closing costs, although it’s still money needed for closing? What is the loan amount? Okay, because whether you’re doing a purchase or refinance, you need to make sure particularly in a refinance that you didn’t get to zero closing costs simply because they raised the loan amount greater than the payoff amount.
So those are the real keys. How much money are you bringing to the table and how is it being used, actually a broker often end up with closing costs being in a negative number, meaning that the lenders rebate not only covers all of the closing costs but will even provide you additional money towards the escrow accounts, that’s something you really kind of want to look for if you can just at least see if it makes sense for you, you’ve seen a lot of rebates still being offered these days. I hope you have found these tips I have shared on how to shop for mortgages enlightening enough. Learn more details at: http://www.mortgagebroker247.com.au/personalloans/