Tip #1: Always Shop For Home Mortgage Rates
Don’t blindly accept a Realtor or Builder referral to submit an application for a Home Mortgage by using their favorite lender. Many times they will say, “We work closely with this man and he gets the job done”. Remember, the Realtor won’t be paying the bill each month for another 30 years, you’ll.
Mortgage Loan Officers that work from a referral system of Realtors and Builders do not have to have competitive Home Mortgage Rates since they have a steady flow of “Drones” (individuals that are known to them and do not store) phoning them. Shop around, get the lowest price Home Mortgage Rate, then if you are inclined, approach the “preferred” Loan Officer you had been known and request him to match with the quotation.
If you submit an application for a Home Mortgage through a favorite lender without shopping, you will pay hundreds or even thousands of dollars in additional costs.
Tip #2: Call For Home Mortgage Quotes After 11:00 a.m. Eastern Time
Mortgage Rates change each day and at times midday. The prior day’s rates typically expire by 8:30 a.m. the following morning. Normally, Home Mortgage Rates are published every day from 11:00 a.m. Eastern time. This varies from lender to lender. To be certain you’re receiving Home Mortgage Rates from the current day rather than a mixture of rates from the previous day from some lenders as well as the recent rates from other creditors, always do your rate shopping after 11:00 a.m. Eastern time.
Get all of your estimates following 11:00 a.m. Eastern time.
Occasionally Home Mortgage Rates change midday due to a volatile bond market. While this happens, some Home Mortgage Lenders will adapt the Discount Points due to their rates with respect to the new bond costs and release new Home Mortgage Rates for this day. Other Lenders may continue to honor their morning prices.
Tip#3: Always Tell The Mortgage Loan Officer You Are Prepared To Apply For A Loan NOW
If you’re buying a house, inform the Home Mortgage Loan Officer you’re Rate shopping and you have a “ratified contract” to purchase a home. Tell him you intend to make a determination and Lock-In a rate on such day, but you have to check a couple other lenders. If he asks you how his rates compare to other people, tell him he is the first person you’ve called. If you are refinancing, inform the Home Mortgage Loan Officer you are prepared to apply for a Refinance Home Mortgage today. If you don’t tell him that, he might offer a fake Home Mortgage Rate quote.
Loan Officers know you will likely talk to another lender with lesser Home Mortgage Rates and the only way he could be sure that you call him back would be to give you a fake quote that appears to be the lowest. He’s expecting you will rate shop for several days and figures you’ll call him back in a day or two since he supplied a low, bogus rate estimate.
How will you compare estimates if you don’t know which quotes are real and that are a part of a bait and switch program?
Tip#4: Ask For The Total Points And The Total Fees
When you telephone a Mortgage Lender, request the “Total Points” (Discount Points, Loan Origination Fee, Broker Points) for each Home Mortgage Rate. Some lenders will only estimate the Discount Points and intentionally exit the Loan Origination Fee. You won’t learn about the 1.00 Point Loan Origination Fee until you apply for the Home Mortgage. By that time, the Loan Officer figures you’ll just accept it because he’s got your application and pulled your credit report. Additionally, Mortgage Brokers often neglect to mention their Broker Fee.
When you’re quoted the Total Points, especially inquire if there’s an extra Loan Origination Fee or Broker Fee being charged. You truly have to nail this down once you talk to a Home Mortgage Loan Officer.
Also, ask for a listing of ALL other fees which will show up on the Good Faith Estimate which you will be paying to the Lender or Broker. Some lenders charge one lump sum fee which includes the Credit Report and Appraisal Fees while other creditors will itemize every fee. Keep it simple and request all charges, including the cost of the credit report and appraisal fees.
A lender will quote these in your Good Faith Estimate, but these charges aren’t related to costs related to a Mortgage Rate quote. The total required to your escrow account will not change from lender to lender and Title Company and Attorney Fees are not being charged by the lender. Don’t include them on your own comparison.
If you’re purchasing a home and you need 60 days to close, make sure that you specifically ask Mortgage Rate quotes using a 60 Day Lock period. Some Home Mortgage Loan Officers will quote rates with 15 Day or 30 Day Lock spans because the Discount Points for shorter lock periods are significantly less than speed locks for longer periods. It is also a waste of your time because the quote is not real if you can’t settle on your loan in 15 days. Always specify a 60 Day Lock-In if you are purchasing a house. Ask for 45 Days if you are refinancing, but you could be able to have it done within 30 days if you’re extremely diligent and telephone your Home Mortgage Loan Officer twice every week for a status of your program.
If your rate lock expires, the lending institution will re-lock you in the greater of the original rate or the current rate whenever you opt to re-lock. That is a LOSE/LOSE position for you. Never let your rate lock expires. Tip#6: Compute The Dollar Cost Of The Points And Add All Fees When you have spent some time talking to a lot of Mortgage Loan Officers, you’ll have lots