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Tips on Shopping for a Home Loan |
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Get the quotes in writing, specifically in the form of a "Good Faith Estimate," insisting the Loan Officer
include all potential charges and/or fees. The estimates and quotes should all be obtained on the same
day, as prices can change substantially from day to day.
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Have the Lenders include a "Truth in Lending Disclosure," which tells you how much the Annual
Percentage Rate. This is not the interest rate, it is only a number to use in comparing one program or
lender against another. The APR needs to be computer-generated to be accurate.
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To compare rates and fees accurately, you must know the "lock" term. Fees and rates are priced by the
length of time they can be locked for, with longer locks costing more in fee than shorter locks. If your
closing is 60 days away, it does no good to compare 30-day rates, nor is it realistic to unknowingly
compare the prices for a short-term lock with those of a long-term lock.
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Ask if any of the "service" fees can be waived: these are charges for things like processing, underwriting,
preparing closing documents, wiring funds, courier services, etc. Lenders that appear to have low rates
and fees often have excessive "garbage charges" that make them significantly less competitive.
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Ask your Realtor what they've heard about the lenders you're considering: good lenders are in business
for the long term, and won't make promises they can't keep, just to get your loan. Because everyone
underwrites loans to generally the same standards, it's rare that one lender can do something others can't,
or at a price substantially lower than the general market. Does the lender you're considering have a
good reputation with your realtor, or others in his/her office?
Remember, as always, both good and bad reputations are earned.
While your realtor wants you to
have the best rate at the lowest price, they can also advise you about all the factors involved in
getting your purchase closed on time, with a minimum of hassle and with your maximum satisfaction in
mind.
The best lender will be the one that listens to your needs and concerns, helps you analyze your
options, best matches the loan product and price to what you want, makes everything and everyone
work together to accomplish what you want, and guarantees your satisfaction.
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