MORTGAGE COMPANIES: WHAT TO LOOK FOR

Before you shop for property, it is more important to shop home mortgage lenders for a loan. By becoming pre-qualified, you will know exactly how much house the lender is willing to approve. Furthermore, you will be able to include your pre-qualification letter when you tender an offer, which will help make the seller take you seriously. Whether you are a buyer or you want to refinance a mortgage, the following criteria are useful ways to make comparisons and narrow your choices.

Features
The online mortgage lenders often include educational material such as self-help guides and mortgage calculators. Most of them post current mortgage rate information for the various types of mortgages that they offer. All of the lenders in our review support online enrollment. Cost, of course, is the most important feature. You won’t truly understand what a mortgage or refinance is going to cost until the bank processes your application to take into account your credit history, income, loan terms and the number of discount points you are willing to pay up front.

Mortgages
Mortgages are a Rubik's Cube with multiple input and output combinations involved to solve the problem for you. There are fixed-rate mortgages with various terms, usually 15 or 30 years. They cost more than adjustable-rate mortgages and in order to take advantage of falling interest rates, eventually you must refinance, which costs money and time to gather and submit paperwork. On the other hand, with a fixed rate mortgage, you know exactly what your payments are going to be and they never increase. Adjustable rate mortgages make themselves attractive with low teaser rates that can then rise to a predetermined cap. In exchange for uncertainty, however, there is the possibility that the rate could adjust downward. In the final analysis, your monthly payments depend on your credit history, your down payment and whether you are willing to pay extra up front to arrive at a lower interest rate than the advertised rate. Although more mortgage choices increase the complexity of your decision, choices are your friend and we recommend that you give preference to those lenders with the most choices.

Help and Support
Obtaining or refinancing a mortgage involves complicated sequences and coordination. So the process will be less stressful if you choose a lender that populates its website with useful educational information. Even more important, however, is to know the lender will respond when you have questions via email, telephone or live chat.

Our mortgage and refinance review presents the information you need to compare mortgage and refinance services. You are more likely to get what you want if you spend the time to know the various types of mortgage and refinancing options and learn the vocabulary. Read the fine print, ask questions until you understand the answers and don’t let anybody rush you into signing anything.

For most would-be borrowers, the challenge is not in finding a mortgage lender, but in sorting through the throngs of banks, online lenders, mortgage brokers and others eager to take your loan application. How do you choose which one will offer you the best deal, and competent customer service to boot?

Cut through the thicket by shopping broadly and then narrowing your focus as you learn more about what type of lending environment makes you most comfortable. Begin to familiarize yourself with various lenders and the deals they're offering by browsing around the mortgage rate tables on Bankrate.com.

Then take your shopping a step further. Go to the bank or credit union where you already have a checking or savings account and ask what types of mortgage deals they offer current customers. And be sure to ask friends and family members for referrals to loan officers and mortgage brokers who gave them good, professional service and helped them find the most competitive loans

Always keep in mind that, not only are you buying a home, you are buying a very expensive financial product -- a mortgage loan. In fact, if you were to take out a mortgage for $300,000, at 6.25 percent interest and keep that loan for the full 30 years, you would end up spending nearly $365,000 in interest alone! You deserve to be treated as a very special customer when you're spending that kind of money.

DIY or hire a broker?

One important decision will be whether to pursue a mortgage on your own or to use the services of a mortgage broker. While a good mortgage broker can shop your loan among several lenders, it's important to understand that brokers don't have special access to deals that are unavailable elsewhere. And a broker is not obligated to find the deal that is best for you. Some have been known to pair a borrower with the mortgage that offers the broker the greatest profit, instead of the lowest cost to the borrower.
Before working with a broker, take the time to talk with two or three of that broker's most recent clients. Ask if they received the same type of loan the broker promised, if the costs were in line with their expectations, if interest-rate lock-ins were obtained without delay and if the closing was smooth and on time. Even if you decide to work with a mortgage broker, your time spent shopping other lenders will help you judge whether the product the broker comes up with is indeed the best deal for you.

Talk with your real estate agent

Always ask your real estate agent for recommendations to good lenders. Even though some brokerages have their own in-house affiliated mortgage lending businesses, good agents will not limit their referrals to just that in-house lender. And because agents direct business their way through boom times and slow times alike, smart loan officers take good care of the clients sent their way by local real estate agents.