How to Find a Good Mortgage Sometimes it can be difficult to find a mortgage that suits your needs. Mortgage interest rates are now available online on rate aggregation websites and lender websites, and several lending companies actively advertise their rates on the internet as a means to attract you to their site. However, this may not always be the best idea. Interest rates are the key factor in determining the monthly payment amount that you will pay for your house, so taking a look at these figures can really help you make a decision about your house buying plans. The mortgage that you choose must fit your financial situation, but the interest rate is just one of the factors that makes up the mortgage.
Many mortgage lenders require that you maintain a certain amount of savings each month as collateral for the mortgage loan. If you happen to have little or no savings, your lender will most likely require that you put up something as security. Typically, this is your checking account balance. While this is not usually a problem for most people, you should be aware that some banks do not offer any type of interest-only or negative amortization mortgage loans, which can be used to lower your monthly payment amounts.
If you have a good credit rating, it might be in your best interest to apply for a traditional mortgage loan through a bank or credit union. A major advantage to these types of mortgage loans is that they come with fixed interest rates and terms. In addition, you might prefer to apply for a mortgage loan through a personal service, rather than through a bank or credit union.
There are a number of mortgage loan originators in San Francisco who can assist you with choosing a home. These experts say that there are advantages and disadvantages to all three approaches. You may choose to go with an independent mortgage broker or you might choose to work through a mortgage broker and originator. Although working directly with the bank or credit union is recommended, many experts say that working with an independent mortgage agent or broker is the best choice. Here are the pros and cons of each:
o Fees: Professionals involved in finding a lender or broker often include mortgage brokers and originators. Usually, the fee you pay them will be less than if you go with an independent broker. In addition, an independent agent or broker might take you more time to weed down various loan offers and review your financial information, so you might have to wait until after you’ve located a home before you can begin to discuss interest rates and terms. In some cases, however, paying a fee might actually help you find a better interest rate. Most experts say that you should shop around and compare interest rates before deciding on a lender or broker. (It is also helpful to check out several lenders and brokers before making a decision on which one to take place with.)
o Interest Rate: One issue to keep in mind is that interest rates for home loans, especially for jumbo mortgages, tend to be higher when you purchase than when you purchase a traditional loan. (Your mortgage broker or consultant should be able to provide you with interest rate information based on various types of loans, such as fixed-rate and adjustable-rate loans. They can also give you pointers on how to get the best possible interest rate.) However, you can lower your interest rate by prepaying a portion of your loan for at least five years or by paying points (commonly known as “premium”) to reduce your interest rate.
o Professional Credit Counseling: In order to get the best possible deal, it’s a good idea to have a professional credit counselor help you in the home loan process. These consultants typically have extensive experience dealing with different types of lenders, brokers, loan originators, etc. When you’re shopping for a mortgage, you want to make sure that you’re working with the right people. These consultants can be found through Mortgage Brokers Associations (MBA), Consumer Credit Counseling Services (CCCS), National Foundation for Credit Counseling (NFCC) or other consumer credit counseling organizations.
o Loan Originator: Sometimes the best way to find a competitive mortgage rate is to work with a mortgage broker or a loan originator. These companies typically have several lenders on their books. The mortgage broker works with lenders on a regular basis and has developed relationships with them; the originator works with a large number of lenders but does not work on a regular basis with them, so he is more likely to know competitive mortgage rates.