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- What Are Netting Escrows & How Does It Work?: The Best Guide - January 2, 2024
- The Secret About Prescriptive Easement: Top Guide 1 Must Know - December 4, 2023
- About Home Equity Loans In Texas And How Can One Obtain It - November 27, 2023
Finding Best Deal On Mortgage Pre-Approval Shopping
When you are planning to buy a new house, most of us tend to shop around for the best possible options out there. However, how would you compare different loans?
In today’s post, we will learn how to determine the best deal when shopping for a mortgage pre-approval.
When you talk to a lender, the first thing that they are going to ask you is, what kind of down payment are you ready to make?.
What kind of income situation are you in? they pull up your credit and let you know the loan amount that you qualify for in form of a pre-qualification letter.
Always Ask For Details
When you are comparing multiple mortgage pre-approval, don’t just settle for a pre-approval letter. Ask the lenders to send you the closing cost sheet of what their fees are going to be.
A lot of times the lenders will send you the entire closing cost estimate and give you a big number, which might include title fees, HOA fees, etc.
Though these components are very important, they play an insignificant role while you are comparing the loans with multiple lenders as these are going to remain the same no matter which lender you choose to work with.
Ask for only the loan fees, what is the lender charging you to do your loan like loan origination fees, appraisal fees, credit report fees, etc.
Knowing the Lender’s Intent
The second thing that you want to make a quick note about is the interest rate.
When people call around they are usually trying to find the best interest rates and that is the main focus because it is easier to focus on.
No one can lock into your interest rate at the pre-approval stage. Every lender has their own ways of doing things.
One might be a little more desperate for your business while the other may be a little conservative with their numbers. You must find their philosophy when you are talking to the lenders.
Comparing Interest Rates
When you are talking to lenders and talking about interest rates it is very important that you have knowledge about the current market interest rates.
Ask the lender what will happen if the loan changes because the market changes every day and you might take a few days or weeks before you can finalize on a house.
The important thing about interest rates that you may want to ask the lender is if it is included with any discount points. Discount points are the fees directly paid to the lender that reduces the interest rates.
A lender might be offering you a very low-interest rate, however, they are not disclosing that you are going to have to pay a little extra cash to get a better rate for you.
Don’t let the interest rate be your prime focus as the lender would not be able to provide you a rate lock until you have signed the contract.
At the pre-approval time, most of the lenders would quote you an interest rate that is a little higher than the current market to ensure there is a buffer kept in case the interest rates go up by the time they are about to lock.
You are In For Good Service
When you are talking to a lender you need to feel like they have your back. You want a lender who is open to your situation and gives the best possible options based on your situation and not take advantage and sell what they want to sell.
The lender should be the one who understands your home goals and work around them.
When you are getting a mortgage pre-approval from any lender try and analyze the kind of service they are providing as it could help you to get through the loan process with ease.
Conclusion
Your home is your goal, and you are the sole person responsible for your choices. You would always want to compare the deals in a fair way to ensure you make the right choice when it comes to buying a new home.
