Be Sure There are No Headaches at Your Closing.
In the newspapers, on TV and especially on the internet, ads and headlines bombard you about the great rates and terms this or that lender can give you. It is too bad that many of these ads are just to draw you in and then you learn the terms are not exactly as advertised.
First of all, know your lender. If you don’t know the lender that offers the best rate, you can find out about it. You can do this by consulting the Better Business Bureau, or the government banking commission.
Another thing you need to do for a problem free closing is to choose a bank that specializes in your kind of loan. Discover how long they have been in business and how long the broker you will be working with has been in business. If you deal with an established, reputable company, it is unlikely that there will be any surprises at the closing.
You can learn a lot about your proposed lender by researching. With all of the information obtainable by us today, it can be difficult to find the rightnformation. But knowing the type of mortgages that are most advantageous for you, and the terms available will help you make your loan decision easier. It is best to make a complete list for comparison purposes.
Make sure you understand for whom these rates are meant. Often the brokers will advertise excellent rates, but it turns out they only apply to top rated borrowers, and everyone else pays more. So get the premiums over the best rate so you can make correct comparisons.
Once you have the average rates on offer, you can ferret out the cons. As they say, if it sounds too good to be true, it probably is. If all of the 30 year loans you are getting quotes on fall within a 75 point spread and one lender boasts 200 points lower, beware!
Don’t be coerced. Make sure your broker is willing to take the trouble to explain terms, rates, points, maturity, etc. to you. You have to be sure you understand each aspect of this important transaction. Do not deal with any broker who is not willing to answer any and all questions.
After you have all the terms agreed upon, obtain a written confirmation. Make sure all the terms are included in the agreement; don’t let the broker say that some details will be ironed out later. Be sure that the index on an adjustable rate mortgage is in the agreement. Make sure all the terms of the lock in period are agreed upon. Make sure the broker is authorized to enter an agreement on behalf of the lender. Most headaches that occur with home loans are a result of verbal agreements that are fast forgotten when the terms are no longer attractive to the lender.
When you receive the written agreement, read it and understand it. If the lender uses legal gobble de gook that you can’t understand, question it. Either get it changed, or have it explained completely so you can consent to it. A broker who is not willing to be clear in his language in a contract is not one you want to work with.
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