Interest Rate Shopping - It is very hard to get an accurate rate quote online or by telephone these days. There are some mortgage professionals that use very sneaky tactics in order to earn your trust. On the internet, there are several websites that disclose national averages or list the current rates from several lenders in your area. Have you noticed that there are several banks and lenders that quote unusually low interest rates on these websites? How are they able to do so?Smart mortgage shopping doesn't mean applying with 25 lenders. In fact, numerous inquires can hurt your score! Comparing quotes from two or three *honest* sources will give you a good idea of what rate, term, and payment to expect. How do you choose an honest broker? Ask your family and friends and don't be afraid to trust your instincts. Be particularly weary of quotes that seem to good to be true and always use caution when applying online.
When you are comparing multiple quotes be sure to compare the closing costs as well. Some lenders will quote you a very low rate, and charge you thousands in discount rates to get that rate. Since there are many factors involved in determining your interest rate, make sure that you are comparing apples to apples and take all factors into account.
When you are rate shopping don't just pay attention to the rates listed on websites and in the newspapers to make your decision as to who to who you decide to work with. The rates listed on websites and newspapers can be seriously outdated and not very accurate. The rates in the Sunday paper usually have to be provided early in the week in order to make it in the paper for Sunday and since rates change on a daily basis these rates may have changed considerably by the time you see them. On the internet there are many companies out there that do not change their rates on a daily or weekly basis so these rates can be seriously outdated as well.
When shopping for interest rates, be sure that you are comparing the same loan programs. You should not ask one company for a quote on a 15 year fixed rate, while asking several others for 30 year fixed rate quotes. Also be sure that you are not being quoted an interest only loan, or a loan with a prepayment penalty attached. Ask for a copy of the Truth in Lending (TIL), to compare rate quotes. The TIL will show the terms of loan and make it easier to compare loan between several companies.
You should also try to do all of your rate shopping at one time; ates can fluctuate from day to day and even in the same day.
How can I use the Internet to qualify for a loan? - It is becoming possible in some cases to get a loan approval over the internet from your home computer. However, you should be cautious when applying for a loan over the internet.
If you are not comfortable filling information out over the internet, I can be reached at 888-418-4467. I can qualify you, as well as discuss possible loan scenarios that may fit your needs.
When applying over the internet, make sure you provide personal information such as social security numbers over secure channels only. Make sure that the online form you are completing is hosted at a secure URL. Simply put, look at the internet address of the form you are completing and make sure it begins with "https://". This is a secure channel. You can also look for a gold padlock in the bottom right hand corner of your browser's status bar. You can double click on the padlock to see important security information about the sites owner/host.
Process of buying a home - When you are looking to buy a home you should consult with your mortgage professional first before you do anything else. You need to find out how much of a home loan and a home you can qualify for and how much you can afford. Call now at 888-418-4467 or email at dave@gofirstsecurity.com to find out how much you qualify for.
Once you have contacted a local mortgage professional, they will be able to answer any questions that you may have in more detail. It is a good idea to write these questions down, and then go through each one with your mortgage broker. If this is your first home, do not hesitate to ask any questions. The more you know, the easier the process will be.
Getting pre-approved is a great way to begin the home buying process. Having a pre-approval in hand is like telling the seller you are paying cash for their home. A true pre-approval is an approval conditioned only upon an appraisal of the home and proper title work. When you have selected the home you wish to make an offer on, include a copy of the pre-approval letter you receive from your mortgage professional. This will give you the leverage you need to buy more home for less money. It will also cut about two weeks off of the closing process if done properly. In order to obtain a pre-approval, simply provide the following during your loan application appointment:
* The last 30 days worth of pay stubs
* The last 2 years W2's or tax returns
* 2 recent bank statements for your checking & savings accounts
* One recent statement for ALL other investment and/or retirement accounts
Other items (if applicable)
* 12 months cancelled rent checks or your landlord's contact information
* A copy of your business license or CPA letter confirming you have been in business at least 12 months
* A letter explaining gaps in employment or delinquent credit issues
If you have trouble providing any of this information, talk with your mortgage professional about the other home loan options available. Having a pre-approval will make the home buying process much easier for all parties involved.
Lowest Mortgage Rate - The lowest mortgage rate is a relative term. The lowest rate that you qualify for in your home may be different than the lowest rate that your neighbor qualifies for with the exact same home. The lowest rate may not provide you with the lowest possible payment. A 15 year fixed rate loan will have lower rates than a 30 year fixed rate loan, but your payment will be lower when the loan is spread out over the 30 years.
There are many factors at play when your interest rate is determined by your mortgage broker. Your Debt to income ratio (DTI) is a major factor as is the amount of assets you have. Credit score is important in the factor but if you have a good amount of assets and good consumer payment history you may still be eligible for conforming interest rates with out a high credit score.
In the mortgage industry, Conforming mortgage interest rates are considered to be the lowest interest rate possible. Conforming loans have one set of qualifying guidelines. In order to get a home mortgage with the lowest interest rate, loan applicants must qualify with acceptable Debt-to-Income Ratio, credit history, property type, residency type, Loan-to-Value Ratio, asset reserves, employment history, etc. Borrowers are penalized with a slightly higher interest rate with each qualification criterion out of the Conforming guidelines.
Just because a mortgage professional quotes an appealing interest rate, it doesn't mean it is the best deal available. If you are rate shopping and the rate is lower with ABC lender than with the majority of other lenders, make sure you pay careful attention to the fees that are being charged. Sometimes lenders will offset the lower interest rate quotes with higher closing fees. Keep in mind that these fees should not be confused with paying discount points to buy down the interest rate.
Rate changed at close - If you arrive at the closing of your mortgage and discover that your interest rate has changed from the original quoted rate there are some things that you can do as a consumer.
If your rate has changed at the closing from what you were quoted originally and throughout the processing of your loan, you need to speak up and ask your loan officer why there is a difference in interest rate. This is one of the oldest tricks in the book that is performed by shady loan officers, especially on purchase transactions where you have to close by a certain date and most home-buyers will just accept the rate to close and get the whole mortgage process over with so they can move into their new home. Sometimes there are valid reasons as to why your rate increased but it should not come as a surprise to you at the closing table. You should be notified before you ever sit down for your loan closing. You should always ask your loan officer to provide you with a rate lock confirmation so that you have proof in writing that your rate was locked ahead of time and you will avoid this problem from ever arising.
Carefully look over the HUD Settlement Statement for errors. Make sure all the factors of your loan, such as down payment, purchase price, term, etc. are correct. If any one of these is an error it could be the cause of the rate change.
No matter what the reason for the increase in interest rate, keep in mind that you are under no obligation to sign the closing documents. Although your loan officer may have the best intentions, ultimately the decision is yours.
First of all, you should discuss the situation with your loan officer before you sign. There is probably a good reason for your interest rate to have changed, and they will be able to explain the situation. If you didn't pay to lock your interest rate, then it will move up and down with the market. It is possible that the interest rate went up because of changes in the market. This is beyond anyone's control, and the only way to avoid it is to lock your rate.
