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| Why you're probably not getting the best mortgage rate quote? |
A loan is basically a product and like all products, its sales
pitches can be exaggerated. The end result is that you end up
with a loan that may not suit your needs at all. When shopping
around for the best mortgage rate that is most suitable for you,
one needs to be highly discerning with exactly what is being
offered.
Short-Term Adjustable Rate Many consumers make the common
mistake of choosing a one-year adjustable rate mortgage due to
the deceptively low rate being advertised. Deceptive, because,
in the very next year, the rate shoots up.
It is most important that you keep in mind that it is not in the
best interests of lenders to offer you a loan with the lowest
possible interest rate. Typically they would prefer you to opt
for the |
highest rate you could possibly afford. Doing so will
ensure that in addition to their regular commission, mostly one
percent of the loan amount, an overage of an extra one or two
percent is earned for selling you a loan priced higher than the
most favorable deal for you. To avoid this situation, insist on
the daily rate card from your loan officer that lists the lowest
rates of all his products.
Regulation Offers Some Protection The Real Estate Settlement
Procedures Act (Respa) lays down that lenders must give an
accurate estimate of closing costs at the time of submitting
your application. Extra charges are in violation of the law.
Nevertheless many banks often try to slip them in. Insist on a
detailed list of closing costs. If you find any |
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suspicious or
unnecessary charges, you have the right to ask your loan officer
for an explanation.
While it may be advisable to seek recommendations for mortgage
lenders, you need to be careful if the advice comes from a real
estate agent. With estate agents, it is more likely that instead
of referring you to the best deal possible, they send you to the
lenders who pay them a commission for doing so.
Mortgage brokers will often mislead you with pre approvals. They
lead you to believe that a pre approval practically guarantees
you the mortgage. However, at the actual time of getting
approved for a mortgage, these pre-approvals are of no value and
may as well be wastebasket approvals.
The Government has made efforts to ensure |
protection for the
consumers with government mandated disclosure forms. However the
miniscule type combined with complex financial figures can be
difficult to read or comprehend easily. Even worse, it can be
use to conceal the truth just as it can reveal it. Overall, make
sure that when you are selecting your quotes, you keep in mind
that opting for what appears to be the cheapest quote initially,
or depending completely on the recommendations of the lender are
not good strategies with seeking out the right mortgage for you.
About the author:
Paul Lerner enjoys writing about a variety of mortgage topics,
including advice on how to get the best mortgage rate quote.
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