Shopping for a mortgage can be a very confusing experience. Often, borrowers do not realize that some of the terms associated with a mortgage may be negotiable, including the rates, as well as the fees that may be wrapped into the rate.
Getting lower mortgage rates usually means first finding the right lender. Most of them have preset interest rates based on a client’s credit scoring, down payments and the terms selected for the loan.
Before approaching any lender, pull together your financial information. This means knowing your assets, liabilities, credit score and anything else that might impact the lender’s decision. As you contact lenders, look for those who specialize in situations similar to your situation, as such a lender may have more choices and options for possible loan programs for you. You will need to be quite candid with the lender and tell them everything about your financial history.
When discussing your various loan options with a potential lender, be sure to inquire about the total loan costs to ensure you understand what you will be getting. Sometimes the lowest rate does not give you the best long-term loan.
If you have a good, clean credit history, make sure that you emphasize this with the lender. A good credit score is imperative to the best loan rates. Your good credit history is a bargaining tool to help you negotiate the best loan product for you.
There are times that negative items are listed on your credit report. If you do discover any discrepancies or negative reports on your credit, take care of the items and clean up your credit report before you proceed. This can be a significant difference in the rates that you will be quoted.
While most borrowers focus on the interest rate offered, pay attention to fees and points, which can add up to some serious money over time. If the lender won’t discount the rate, ask if they will waive some fees or points. Paying less in fees will enable you to put down that money towards the property, reducing the amount you need to borrow and thereby saving you all of the interest that you would have paid during the life of the loan on that money.
Let your lender know that you are talking to several lenders and are shopping for the best deal. Explain any deals that you have been quoted by other lenders to see if the lender will match or beat the deal. Like any business, lenders are competing for your business and will want to keep it if possible so don’t be afraid to negotiate with them.
The author has been publishing commentary on home loans for the last six years. Additionally, this writer loves contributing information about New York City neighborhood subjects, such as Murray Hill apartments along with East Village apartments.
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