Find The Best Home Loan Possible
- Date: 2010-07-19 - Word Count: 647
Share This!
When shopping for a home mortgage loan , it is crucial to make sure that you compare home loan offers to see if you are getting the best deal. But for many home buyers comparing mortgage loans is not an easy task. Below are some easy steps so you can do to compare several different mortgage loan proposals and make sure you are getting the best possible home loan.
Verify that your loan officer has a National Mortgage Licensing System Number
The first step you will need to do is make sure that you are working with a licensed mortgage consultant . In 2010 , both mortgage bankers and mortgage brokers have to be licensed. Each loan originator must have a license number that is part of the National Mortgage Licensing System (NMLS). Each loan consultant must display their NMLS number on any form of advertisement, website, and any other marketing materials. You should always ask a loan originator if they have a NMLS number. Finally, loan originators can only do loans in states they have a license in. For example, if I have a mortgage license in Texas, then I can only originate Texas home loans.
Compare Apples to Apples
The hardest thing to do when shopping for a home loan is trying to compare offers from all the different lenders . The reason for this is that many companies have different closing cost and offer different rates, but if you understand how to ask the right questions, this process can be simpler.
First, don't ask the question, "What is the best rate you can give me." This question is open ended and closing cost plays a major factor in the rate. The best rate a mortgage lender can offer you will have the highest closing cost. When trying to compare offers from other home loan lenders, this can be tricky. Instead, you should ask the question, "What is the lender closing cost associated with a 30-year FIXED rate mortgage at X%?"
This question is direct and will make choosing a company much easier!
Every lender can tell you what the lender closing cost will be at a particular rate. For example, Lender A charges $2100 in lender cost for a rate of X% and Company B will charge $2500 in lender closing cost for the same rate. When comparing these numbers, it is easy to see that the Company A is offering the best deal!
When comparing closing cost, only compare the LENDER closing cost. Most home loan lenders will estimate 3rd party charges like title company fees or attorney fees and prepaid items like property taxes and home owners insurance. These fees are estimated and are charged by other companies other than the lender . Let's use the same lenders in the example above and say that Company A estimated prepaid and 3rd party fees at $3500. Company B estimated these fees at $2500. When you add their lender fees to the closing cost estimate, Company A is at $5600 and Company B is at $5000. It looks like Company B is offering the best deal , but since these are only estimates, Company A is still offering the best deal since they have $400 less in LENDER fees. Think of LENDER fees as the charge for the interest rate. These are also the fees that the company has control over!
Finally, when comparing home loans, compare like rate offers meaning that if you are getting a quote for a 30-year loan at 4.75%, make sure that all offers you are comparing have the same rate. Also, make sure you are comparing the rate with the same home loan program. For example, compare FHA home loan rates with other FHA home loan rates. You do not want to compare a FHA home loan with a Conventional home mortgage loan since these are two different types of home loan programs.
Hopefully this will help when shopping for a mortgage loan.
Verify that your loan officer has a National Mortgage Licensing System Number
The first step you will need to do is make sure that you are working with a licensed mortgage consultant . In 2010 , both mortgage bankers and mortgage brokers have to be licensed. Each loan originator must have a license number that is part of the National Mortgage Licensing System (NMLS). Each loan consultant must display their NMLS number on any form of advertisement, website, and any other marketing materials. You should always ask a loan originator if they have a NMLS number. Finally, loan originators can only do loans in states they have a license in. For example, if I have a mortgage license in Texas, then I can only originate Texas home loans.
Compare Apples to Apples
The hardest thing to do when shopping for a home loan is trying to compare offers from all the different lenders . The reason for this is that many companies have different closing cost and offer different rates, but if you understand how to ask the right questions, this process can be simpler.
First, don't ask the question, "What is the best rate you can give me." This question is open ended and closing cost plays a major factor in the rate. The best rate a mortgage lender can offer you will have the highest closing cost. When trying to compare offers from other home loan lenders, this can be tricky. Instead, you should ask the question, "What is the lender closing cost associated with a 30-year FIXED rate mortgage at X%?"
This question is direct and will make choosing a company much easier!
Every lender can tell you what the lender closing cost will be at a particular rate. For example, Lender A charges $2100 in lender cost for a rate of X% and Company B will charge $2500 in lender closing cost for the same rate. When comparing these numbers, it is easy to see that the Company A is offering the best deal!
When comparing closing cost, only compare the LENDER closing cost. Most home loan lenders will estimate 3rd party charges like title company fees or attorney fees and prepaid items like property taxes and home owners insurance. These fees are estimated and are charged by other companies other than the lender . Let's use the same lenders in the example above and say that Company A estimated prepaid and 3rd party fees at $3500. Company B estimated these fees at $2500. When you add their lender fees to the closing cost estimate, Company A is at $5600 and Company B is at $5000. It looks like Company B is offering the best deal , but since these are only estimates, Company A is still offering the best deal since they have $400 less in LENDER fees. Think of LENDER fees as the charge for the interest rate. These are also the fees that the company has control over!
Finally, when comparing home loans, compare like rate offers meaning that if you are getting a quote for a 30-year loan at 4.75%, make sure that all offers you are comparing have the same rate. Also, make sure you are comparing the rate with the same home loan program. For example, compare FHA home loan rates with other FHA home loan rates. You do not want to compare a FHA home loan with a Conventional home mortgage loan since these are two different types of home loan programs.
Hopefully this will help when shopping for a mortgage loan.
Related Tags: mortgages, home loans, texas home loans, fha home loans
Your Article Search Directory : Find in Articles
Recent articles in this category:
- Understand The Fha Guidelines Before Considering Fha Mortgage
The U.S. economy was hit hard by the global financial meltdown. In the housing sector, the crisis is - Basic Facts About Multifamily Apartment Construction Loans
When you make an investment, you surely think of getting something out of it to make the deal profit - Commercial Mortgage Refinance Loan - Ideal Solution For Financial Problems
Financial security is something which we have to plan from before. In life, there is no certainty wh - Free Government Grant Money Eligibility Requirements
All of us hear about free government grant money. But what is involved in obtaining this money? What - Top 10 Tips On Buy To Let Mortgages And Property Hunting
If you are looking for an opportunity to invest your savings or any money you have come into, there - A Few Tips On How To Stop Foreclosure
In case you are facing certain financial catastrophe caused by a loss or relocation of a job, or wha - How To Stop Foreclosure And Lose Your Residence To The Bank
In today's market, there are more and more citizens that get big loans then they use their home as a - Most Excellent Way To Stop Foreclosure - The #1 Blueprint For Saving Your Home
Just what is the best measure to stop foreclosure? No doubt you are browsing for an answer to that q - Act Fast To Stop Foreclosure
If you would like to find out how you can put a stop to foreclosure, there is not much to accomplish - Tips For Buying A Home With No Money
There is a popular belief that you can only buy a home if you have great credit. This is false becau
Most viewed articles in this category:
- Mortgage Refinancing - Rate Caps Protect You When Refinancing With an Adjustable Rate Mortgage
Adjustable Rate Mortgages can save you money when mortgage refinancing if you fully understand how t - 100% Mortgage Loans: What You Need to Know
Coming up with a 20% down payment can be a difficult task for many potential homebuyers. If you are - Home Equity Loan Pitfalls
The home equity loan came of age in 1996 when changes in the tax law eliminated deductions for the i - Mortgage Refinancing: How the Fannie Mae Weekly Yield can Help You Comparison Shop
Mortgage refinancing without knowing Fannie Mae's weekly yield is like buying a used car without kno - How to Pay Off Your Mortgage in 7 Years, Without Extra Payments
One of the most exciting new topics concerning wealth is “How to Pay Off Your Mortgage in - Mortgage Rate Comparison
Trying to get an "apples to apples" mortgage rate comparison can often be quite a hassle. Traditiona - Should I Pay Off My Mortgage Early?
Many people think that real estate debt is good debt. They think that their mortgage is their bigges - Mortgage Refinancing: Beware the Mortgage Vultures
If you are in the process of mortgage refinancing you need to be wary of overpaying for your loan. - Mortage Loans - How Much Does It Actually Cost In The End
Mortgage loans are the loans used to finance most people's first home. It is the big loan that ever - Where To Locate Home Improvement Loan Companies
Where to locate home improvement companies is a question that arises from many different people. Som