Shop Around for a Mortgage
Shop Around for a Mortgage
If you have decided to take the leap into home ownership or you
are interested in refinancing your current mortgage, one of the
first things you will need to do is track down a mortgage.
I honestly can't tell you just how many mortgage companies there
are in the United States, but I can tell you this, there are a
lot of them.
Mortgage companies also come in a few different forms. You might
recognize one as your local bank, but there are also wholesale
lenders who use not only there own loan officers to originate
mortgages, they will also use mortgage brokers. Than you have
your retail lenders, who use only their own employed loan
officers.
Because there are so many mortgage companies out there, the
industry has become highly competitive.
So before you commit to the first lender you approach and start
filling out applications, look again, and consider shopping
around. Like I said, the mortgage industry is highly
competitive, so let them fight over you.
You don't have to go crazy when shopping for a lender. No more
than five inquiries should be your limit. Talk with them, find
out what programs they have to offer, and at what rate. Ask
about closing costs. Remember, closing costs should not exceed
5% of the total amount of the loan at the very most. (This does
not include the down payment).
By shopping around, you will be able to get a feel for what is
out there, and whatever lender offers you the best deal to fit
your needs and your budget, should be your lender of choice.
The down fall to speaking with one lender is, you are limiting
yourself too just their products and services, as well as their
rates. How do you know you can't get a better deal somewhere
else? Most likely you can.
Shop around for a mortgage the way you would shop around for a
car. Look at a few of them at different dealerships, test drive
them, discuss pricing with the sales person, than once you and
the selling party have come to an agreement, make the purchase.
Buying or refinancing a home is not something you want to rush
into. So take your time and educate yourself. Talk to people
within the industry, shop around, than make an educated decision
based on what best fits your needs.