The following article gives information on How to identify the perfect mortgage? To find the perfect mortgage loan, you will need to shop around. Whether your mortgage is for a refinance, home purchase, or a home equity loan, it’s a product just like any other- and as such, you may be able to negotiate the terms and the price.
Mortgages are available from a variety of lenders- commercial banks, credit unions, and mortgage companies. Every lender will have a different price, so you should look at a few lenders to make sure you are getting a good deal. Alternatively, you could hire a mortgage broker to find a lender that suits your needs.
You may not always be sure whether you’re dealing with a broker or a lender, because some financial entities act as both. Most broker ads do not actually use the word “broker”, so before you enter into a contract, you should always ask if a broker will be involved. Brokers get paid for their service, and those fees are typically in addition to the lender’s and other fees. Broker pay can come as “points” paid along with closing costs, or added to your interest, or even both. Ask the broker how they are paid, so you can compare fees from various lending sources. Here are some things to ask your broker or lender:
*Ask for a list of current interest rates, and whether they are the lowest for the day/week.
*Whether the rate is adjustable or fixed. Remember, when the interest rate rises, so does your monthly payment.
*Ask about the APR, which includes broker fees, points and other fees.
Mortgage loans usually involve a laundry list of other fees, such as underwriting, origination, transaction, closing and settlement costs. Every good broker or lender should be able to provide you with an estimate, and in most cases, the fees can be negotiated upon. Some of those fees are paid at application time, and others are paid when closing. Sometimes, the money for the fees can be added to the cost of the loan, and there are loans available at no cost, but at a much higher interest rate.
You should also ask what the required down payment will be. Some require a minimum of 20%, but there are lenders that offer loans with less than a 20% down payment. If the down payment isn’t at least that high, most lenders require the buyer to pay for PMI, or private mortgage insurance. That coverage reimburses the lender if the buyer defaults.
Ask about any special programs your lender may offer to assist with the down payment, and ask if and how long you will need PMI. Once the terms are agreeable to you, get a “lock-in” from the broker or lender, which should include the agreed-upon rate, the time frame the lock-in is good for, and the number of points you will need to pay, if any. Following those steps and using these tips will ensure that you find the perfect mortgage.