There are plenty of choices.
It's a Jungle Out There
The home loan industry is
booming. There are more places to borrow than ever before, including mortgage
companies, banks, savings and loans, and credit unions. Your first priority is
to shop around, a lot! Interest rates and points vary substantially between lenders.
It's going to take time-be prepared to dial lots of phone numbers.
where do you start? Online mortgage brokers offer competitive marketplaces that favor consumers. Many publish a
list of mortgage rates in the real estate section. Check with friends and coworkers.
Or check with your real estate agent-some local Boards of Realtors maintain a
list of rates on the Multiple Listing Service. If no rate reporting is available,
pull out the Yellow Pages and start telephoning.
Don't rush to the lowest rate in the newspaper.
Choosing the right lender is a major decision you'll have to live with for a long
time, or at least until you refinance at a better interest rate. Your main priority
is finding someone you can trust and communicate with. You must know with whom
you're dealing, and that includes understanding the difference between mortgage
bankers and mortgage brokers.
Unlike a loan rep employed at a bank or other lending institution, the mortgage
broker works independently. The advantage of a broker is that they sometimes have
access to more flexible loan terms and qualifying requirements-you're selecting
from a portfolio of loans backed by a variety of investors. Take time to be sure
you're comfortable with a mortgage broker's fees BEFORE signing a loan application.
bank is more of a sole-source provider of loan services. Unlike the broker who
connects borrowers with lenders, mortgage bankers are in the business of directly
making loans. They make their money from loan fees, points and other charges.
On to Comparing Loan Costs
There are differences
that can add up to a higher bottom line.
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