Get The Best Home Loan That’s Possible

When you’re shopping for your home mortgage loan, it’s vitally important that you make sure to compare the offers out there and get the best home loan that’s possible. Some home buyers find comparing mortgage loans very difficult. Here are a few steps you can take to do comparisons between several loan proposals to be sure you get the best loan possible:

Never ask the question “what’s the very best rate I can get?”. This is an open ended question, and your closing costs are going to be a main factor in your rates. Actually, the best rates mortgage lenders can give you are going to have the highest closing costs. So when you try to compare offers between lenders, this may get a bit tricky. You should ask about the closing cost instead. See what they would be on 30 years with a fixed rate, at a specific percentage. This is much more direct and makes your choice a whole lot easier.

Be Sure You Are Comparing Apples to Apples – One of the hardest parts of shopping home loans is figuring out all the various offers from so many different lenders for comparisons. The reason is because they all have different rates and closing costs. But once you know the right questions to ask, you can simplify this process.

Verify The Loan Officer is Has a Licensing System Number – Your very first step is to ensure you will be working with a mortgage consultant who is licensed. After 2010 all mortgage bankers along with mortgage brokers had to be licensed. Every loan originator needs to have a license number. This is part of what is known as the ‘NMLS’ (National Mortgage Licensing System). Every loan consultant also must display that NMLS number on all forms of advertising, any websites, or any other type of marketing materials. You always want to ask the loan originator about this number. A loan originator is only able to work with loans within the states they are licensed for. If I have a Nevada mortgage license, I am only able to originate loans for Nevada homes.

All lenders are able to tell you about the closing costs for specific rates. One example would be this – Lender ‘A’ will charge $2000 for a rate of X%, and Company ‘B’ is going to charge $2300 in closing costs for this very same rate. When you compare the two, it’s very easy to see Lender ‘A’ has the best offer and deal.

When you compare closing costs, compare only the lender closing costs. Many home loan lenders estimate their third party charges. These are things like your title company fees, or your attorney fees, and any prepaid items such as property taxes or home owners insurance. All these fees get estimated and are then charged by companies other than your lender. Let’s say that Lender ‘A’ estimated the prepaid and third party fees to be $3500. Then Lender ‘B’ estimated them at $2500. Whenever you add in the lender fees to the estimate of the closing costs, Lender’A’ is at $5500 while Lender ‘B’ is now $4800. Now it looks as if Lender ‘B’ is holding the best deal. But because these are just estimates, Lender ‘A’ still has the best offer because their lender fees are less.

About the Author

Jim writes articles concerning Hawaii mortgages and on Hawaii Home Loans.