Mortgage shopping tips
With so many changes in the real estate and mortgage marketplace most consumers are overwhelmed today at the amount of information available and simply go into information overload when it comes to buying a home for getting a mortgage. I am going to give you some tips and things to look for when you're getting a mortgage for buying a home.
The first thing that you must understand when shopping for a mortgage is the fact that the interest rates in lender fees can be substantially different from one lender to another. For this reason it is a very good idea to shop multiple lenders before making a decision. You should be able to call any lender and provide the information listed below and they should be able to provide you an accurate quote based on this information:
1. Credit score
2. Purchase price or appraised value of the property
3. Loan amount requested
4. State and county of the property
If you provide this information to any reputable mortgage loan officer should be able to provide you an accurate quote with multiple different mortgage rates and options.
Most people are not aware that interest rates in lender fees work directly opposite of each other. If one goes up the other goes down. This means that you will have multiple options when it comes to selecting an interest rate.
For example you may be able to obtain an interest rate of 4.5% with no lender fees. Or you may be able to obtain the rate of 4% with $4000 in lender fees. Or you may be able to obtain an interest rate of 5% with a $3000 closing cost credit from your lender.
As you can see you can decide where you want to be on the interest rate scale. This may seem slightly confusing but your best option will be determined by your plans for the property. What I mean by that is how long do you plan to stay in this property?
If you're going to be in this property for less than five years you should probably take the highest rate with the closing cost credit. If you are going to stay in this property forever and keep this loan for 30 years then you should probably take the lowest rate and pay the additional lender fees assuming that you have the resources to do that.
The reason is because in order for you to take advantage of the lower interest rate you need to be in the property for a long period of time. It usually does not make sense to pay for a lower interest rate if you're only going to be in the property for a short period of time because you will not have enough time for that interest rate to save you enough money to cover your original investment.
For the reasons mentioned above when you compare different lenders you should not only compare interest rate but you should also compare lender fees. So for each and every quote that you get you should ask the mortgage loan officer what are the lender fees and what is the interest rate attached to those lender fees.
Additional Resources:
Florida Mortgage Rates
Florida Mortgage Information
Florida Relocation - Need locals to help us decide where to move!
