10 Tips for Saving Thousands on Your Mortgage!!

1. Lenders are a lot smarter than the average person about mortgages. To improve your odds you need to educate yourself in order to negotiate a better deal!
   
2. Get your credit report. Most credit reports have many errors. You’ll want to make sure these are corrected before talking to a lender or applying for a loan. (In some cases your lender can help you fix the errors.) And you’ll need to have your credit score to give you an idea of what kind of a loan you can qualify for. Do all this 30 to 60 days before applying for a loan to give the credit bureaus enough time to correct errors.
   
   
3. Do not simply call a lot of lenders and ask, “What are your rates.” Many lenders quote programs which are designed specifically to sucker telephone rate shoppers. It will sound good because it was designed to sound good. Some loan reps purposely lie to phone shoppers in order to induce borrowers to apply with them. Most people don’t know enough to catch them. And mortgage brokers aren’t regulated, so they don’t have to abide by the rules because there aren’t any!
   
4. Your objective is to find a lender you can trust. You’ll find such a person through referrals from your real estate agent. Friends, co-workers, and neighbors aren’t as knowledgeable as a reputable REALTORr® about the best lender to use. Be wary of finding a lender on the internet. Their customer service may or may not be what you’ll need to get your loan approved in time to meet the purchase agreement deadline for loan approval. You don’t want to lose the house you’ve decided on just because you can’t get in touch with your online lender! (For clients of Buyers Advantage Real Estate, I recommend an online lender whose rates and fees are the lowest and customer service the best. Ask me about Rate 1.)
   
   
5. Determine which loan program is best for you. As an example, do not pay for 30 years of expensive rate protection (what the 30 year fixed rate loan does) if you’re only going to be in your home for 3-5 years.
   
   
6. Beware of “Zero Down” home loans. These loans are available, but they’ll raise your house payment considerably! And loan costs may be much higher than a standard loan that requires a down payment.
   
   
7. Get a Good Faith Estimate. Your lender is legally obligated to send you the RESPA and Good Faith Estimate of Closing Costs within 3 days of application. Insist on this! Read them and ask questions until you understand them. While this disclosure is not binding on the lender, it will show the costs and fees on the program on the date you applied, which is a good starting point. You’ll know ahead of time just about what you can expect to pay for closing costs.
   
   
8. You need to find out your lender’s lock policy. They probably won’t lock until you tell them to. The market can change rapidly, so developing and executing a good lock-in strategy is very important.
   
   
9. Make sure that if the market improves while your loan is in process, your lender passes 100% of the benefit of the improvement in rates on to you!
   
   
10. Refinancing – obtaining a new mortgage to replace an existing one – can save you big money, but not in the way you might think. Don’t go back to another 30 year loan even though the payment is lower, because you can actually end up paying more! Keep the same payment you have now and it will reduce the term of the loan, saving you tons of money!
    

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