5 Guidelines to Choose the Right Home Loan
Once
you are satisfied that you are working with a top-quality professional
mortgage advisor, here are the rules and secrets you must know to “shop”
effectively.
First, if it seems to good to be true, it probably is. But you didn’t really need me to tell you that, did you? Mortgage money and interest rates all come from the same places, and if something sounds really unbelievable, you'll ask a few more questions to find the hook. Is there a prepayment penalty? If the rate seems incredible, are there extra fees? What is the length of the lock-in? If fees are discounted, is it built into a higher interest rate?
Second, you get what you pay for. If you’re looking for the cheapest deal out there, understand that you’re placing a hugely important process into the hands of the lowest bidder. Best case, expect very little advice, experience and personal service. Worst case, expect that you may not close at all. All too often, you don’t know until it’s too late that cheapest isn’t best. But if you want the cheapest quote, just surf the Internet and try your luck. If you’ve heard any horror stories from family members, friends or coworkers about missed closing dates, or surprise changes at the last minute on interest rate or costs… these are often due to working with discount or internet lenders who may have a serious lack of experience. Most importantly, remember that the cheapest rate on the wrong strategy can cost you thousands more in the long run. This is the largest financial transaction most people will make in their lifetime. That being said – I'm not necessarily the cheapest. The rates and costs I offer are very competitive, but I’ve also invested in the tools I need to ensure the top quality experience that you deserve.
Third, make correct comparisons. When looking at estimates, don’t simply look at the bottom line. You absolutely must compare lender fees to lender fees, as these are the only ones that the lender controls. And make sure lender fees are not “hidden” amongst the title or state fees. A lender is responsible for quoting other fees involved with a mortgage loan. But these third-party fees are often under-quoted up front by a lender to make the bottom line appear lower, since they know that many consumers are educated to simply look at the bottom line! APR is easily manipulated as well, and worthless as a tool of comparison.
Fourth, understand that interest rates and closing costs go hand in hand. This means that you can have any interest rate that you want – but you may pay more in costs if the rate is lower than the norm. On the other hand, you can pay discounted fees, reduced fees, or even no fees at all – but understand that this comes at the expense of a higher interest rate. Either of these balances might be right for you, or perhaps somewhere in between. It all depends on what your financial goals are. A professional lender will be able to offer the best advice and options in terms of the balance between interest rate and closing costs that correctly fits your personal goals.
Fifth, understand that interest rates can change daily, even hourly! This means that when you’re comparing lender rates and fees, this is a moving target. For example, if you have two lenders that you just can’t decide between and want a quote from each – you must get this quote at the exact same time on the exact same day with the exact same terms or it will not be an accurate comparison. You also must know the length of the rate lock you are looking for, since longer rate locks typically have slightly higher rates.
Again, my advice to you is to be smart. Ask questions. Get answers. I wouldn’t be encouraging you to shop around if I wasn’t pretty confident that I can give you great value and serve you the very best.
Ready to get started? Just give me a call today at 281-978-5626 or send me a message.
First, if it seems to good to be true, it probably is. But you didn’t really need me to tell you that, did you? Mortgage money and interest rates all come from the same places, and if something sounds really unbelievable, you'll ask a few more questions to find the hook. Is there a prepayment penalty? If the rate seems incredible, are there extra fees? What is the length of the lock-in? If fees are discounted, is it built into a higher interest rate?
Second, you get what you pay for. If you’re looking for the cheapest deal out there, understand that you’re placing a hugely important process into the hands of the lowest bidder. Best case, expect very little advice, experience and personal service. Worst case, expect that you may not close at all. All too often, you don’t know until it’s too late that cheapest isn’t best. But if you want the cheapest quote, just surf the Internet and try your luck. If you’ve heard any horror stories from family members, friends or coworkers about missed closing dates, or surprise changes at the last minute on interest rate or costs… these are often due to working with discount or internet lenders who may have a serious lack of experience. Most importantly, remember that the cheapest rate on the wrong strategy can cost you thousands more in the long run. This is the largest financial transaction most people will make in their lifetime. That being said – I'm not necessarily the cheapest. The rates and costs I offer are very competitive, but I’ve also invested in the tools I need to ensure the top quality experience that you deserve.
Third, make correct comparisons. When looking at estimates, don’t simply look at the bottom line. You absolutely must compare lender fees to lender fees, as these are the only ones that the lender controls. And make sure lender fees are not “hidden” amongst the title or state fees. A lender is responsible for quoting other fees involved with a mortgage loan. But these third-party fees are often under-quoted up front by a lender to make the bottom line appear lower, since they know that many consumers are educated to simply look at the bottom line! APR is easily manipulated as well, and worthless as a tool of comparison.
Fourth, understand that interest rates and closing costs go hand in hand. This means that you can have any interest rate that you want – but you may pay more in costs if the rate is lower than the norm. On the other hand, you can pay discounted fees, reduced fees, or even no fees at all – but understand that this comes at the expense of a higher interest rate. Either of these balances might be right for you, or perhaps somewhere in between. It all depends on what your financial goals are. A professional lender will be able to offer the best advice and options in terms of the balance between interest rate and closing costs that correctly fits your personal goals.
Fifth, understand that interest rates can change daily, even hourly! This means that when you’re comparing lender rates and fees, this is a moving target. For example, if you have two lenders that you just can’t decide between and want a quote from each – you must get this quote at the exact same time on the exact same day with the exact same terms or it will not be an accurate comparison. You also must know the length of the rate lock you are looking for, since longer rate locks typically have slightly higher rates.
Again, my advice to you is to be smart. Ask questions. Get answers. I wouldn’t be encouraging you to shop around if I wasn’t pretty confident that I can give you great value and serve you the very best.
Ready to get started? Just give me a call today at 281-978-5626 or send me a message.
Daniel Plant, CMPS
NMLS # 215164 Capital Concepts, Inc. 11200 Westheimer Rd, Suite 150 | Houston, Texas 77042 | 281-978-5626 Direct
713-651-9500 xt. 205 866-396-2165 E-Fax |
