Mortgage shopping tips
Today we are going to cover some more mortgage shopping tips. I am going to give you some great tips for saving you time and money on your closing costs.
As we discussed in a previous article interest rates and lender fees vary greatly from lender to lender and company to company. For this reason it is important to shop multiple companies as we have already discussed.
What we have not discussed is the ability to shop other aspects of your closing costs that are not necessarily controlled by your mortgage lender. Some of these aspects include your title company and closing fees, your homeowners insurance, any potential inspections such as surveys or pest inspections.
Shopping for a mortgage company in mortgage loan officer should discuss these third-party charges with him or her. Some mortgage companies will not allow you to select your own title company to do the closing.
I would suggest that you steer clear of these mortgage companies. Any reputable mortgage company will allow you to select your own third-party service providers with the exception of the appraiser.
You will never be allowed to select the appraiser, but you should be allowed to select the title company, land surveyor, or any other third-party service that is needed assuming that you are the one that is paying for that service.
This is important because some mortgage companies may own a title company that does their closings. If this is the case they will try to steer you to the title company because they make more money if you use their title company. Some mortgage companies or even mandate that their title company must be used if you do a loan with them.
While that requirement is acceptable if their title company fees are competitive with the market, you must do your own research to ensure that this is the case.
I would suggest calling multiple title companies and requesting a quote for a mortgage closing and title insurance. You will need to provide them the loan amount, and the purchase price if the loan is to purchase a property.
If the loan is for a refinance you only need to provide them the loan amount. Each title company should then be able to give you a quote for their closing fees and title insurance premium amounts.
Once you have some quotes from the open market you can compare these quotes to the fees from the title company that you're mortgage loan officer would like for you to use. Shopping your title companies could potentially save you over $1000 or more depending on your loan amount.
Title services are usually one of the most overpaid for services in any mortgage transaction. There are so many title companies out there that will do these services very inexpensively but you have to find them on your own because you're mortgage loan officer most likely already has an existing relationship with a title company that they prefer to use.
Again let me clarify that it is not a bad thing if you're mortgage loan officer has an existing relationship with a title company that they prefer to use as long as that title company is providing fair and reasonable fees for those services. But it is your job to make sure that is the case.
Additional Resources:
Florida Relocation - Need locals to help us decide where to move!
Florida Relocation - Need locals to help us decide where to move!
Florida Relocation - Need locals to help us decide where to move!
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Florida Mortgage Rates & Florida Mortgage Rate Shopping Tips
Mortgage shopping tips
Another question that you should be asking any potential mortgage loan officers is in regards to closing time frame and interest rate locks. You should first determine how long they expect it would take for you to close on your mortgage.
This can vary substantially from one lender to another. The timeframe that you should expect to hear from your mortgage loan officer should be anywhere from three weeks to 60 days.
Obviously if they tell you it's going to take 60 days to close you should probably look for other options unless there rates and fees are just substantially better than everyone else in the time frame is not important to you.
And on the other hand if they tell you that they can close in 7 to 10 days while it is possible I would be a little bit is that it's not common in the industry.
Once you determine how long they expected to take four closing you can then determine how long you need to lock your rate for. You should also ask your potential mortgage loan officer if there is a fee for locking your rate.
Some mortgage loan companies or banks will charge a rate lock fee. They charge you this fee to make sure that you are committed to them. They will usually credit this fee back to you at closing but it is usually nonrefundable if you do not close the loan with them.
I would probably steer away from a company that charged a rate lock fee, but that's not a hard and fast rule. If I was very comfortable with them, they had good reviews online and they were substantially better in pricing and other lenders may still consider them, but if I could get the same pricing somewhere else without a rate lock fee that is probably what I'll do.
It is okay to pay the appraisal fee when you lock your rate, but that is separate from a rate lock fee. You should also ask your mortgage loan officer if the appraisal is transferable to another lender should something happen to your loan.
It is always a good idea to have a transferable appraisal because you never know what could happen and if your loan is denied for some unusual reason you would like to be able to take the appraisal to another lender so that you do not have to pay for a second appraisal at another lender.
The last consideration regarding rate locks are float down options. Some mortgage companies will offer you the option to get a lower rate if rates improve during the processing of your mortgage application. If you are working with a lender who offers a float down option you should get the details of the requirements up front.
Most mortgage companies require their rate to drop a certain amount before you are eligible and while your rate will be lowered it will not be lowered to the current market rate. For this reason it is important to discuss if a float down option is available, and if so what the details are or what the requirements are for you to be eligible.
Additional Resources:
Florida Mortgage Rates
Florida Mortgage Information
Florida Relocation - Need locals to help us decide where to move!
Another question that you should be asking any potential mortgage loan officers is in regards to closing time frame and interest rate locks. You should first determine how long they expect it would take for you to close on your mortgage.
This can vary substantially from one lender to another. The timeframe that you should expect to hear from your mortgage loan officer should be anywhere from three weeks to 60 days.
Obviously if they tell you it's going to take 60 days to close you should probably look for other options unless there rates and fees are just substantially better than everyone else in the time frame is not important to you.
And on the other hand if they tell you that they can close in 7 to 10 days while it is possible I would be a little bit is that it's not common in the industry.
Once you determine how long they expected to take four closing you can then determine how long you need to lock your rate for. You should also ask your potential mortgage loan officer if there is a fee for locking your rate.
Some mortgage loan companies or banks will charge a rate lock fee. They charge you this fee to make sure that you are committed to them. They will usually credit this fee back to you at closing but it is usually nonrefundable if you do not close the loan with them.
I would probably steer away from a company that charged a rate lock fee, but that's not a hard and fast rule. If I was very comfortable with them, they had good reviews online and they were substantially better in pricing and other lenders may still consider them, but if I could get the same pricing somewhere else without a rate lock fee that is probably what I'll do.
It is okay to pay the appraisal fee when you lock your rate, but that is separate from a rate lock fee. You should also ask your mortgage loan officer if the appraisal is transferable to another lender should something happen to your loan.
It is always a good idea to have a transferable appraisal because you never know what could happen and if your loan is denied for some unusual reason you would like to be able to take the appraisal to another lender so that you do not have to pay for a second appraisal at another lender.
The last consideration regarding rate locks are float down options. Some mortgage companies will offer you the option to get a lower rate if rates improve during the processing of your mortgage application. If you are working with a lender who offers a float down option you should get the details of the requirements up front.
Most mortgage companies require their rate to drop a certain amount before you are eligible and while your rate will be lowered it will not be lowered to the current market rate. For this reason it is important to discuss if a float down option is available, and if so what the details are or what the requirements are for you to be eligible.
Additional Resources:
Florida Mortgage Rates
Florida Mortgage Information
Florida Relocation - Need locals to help us decide where to move!
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