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Smart Mortgage Shopping

Posted by  on Aug 09, 2010
 

Consumers, while mortgage shopping, should be asking a myriad of questions. We would
recommend:

1. Shop multiple lenders. Don't allow yourself to be steered by your Realtor to their mortgage lenders. New homes often offer incentives to use their mortgage company, maybe granite counter-tops or special carpeting. In many cases their mortgage company is not very competitive with their rate and their fees. That counter-top upgrade could cost you thousands of dollars over the entire life of the loan.

2. Always get a good faith estimate. Do your shopping, get 3-4 good faith estimates and compare them based on the total package. Check the rate, review all fees, term points and APR before making any decision.

3. Show other lenders offers you already have received. Lenders are often willing to compete for your loan.

4. Get pre-qualified prior to shopping for a new home. Sellers are more likely to deal with you if they know in advance that you are approved to finance the transaction - get approved for as much as possible.

5. Once you have narrowed down your search spend a few minutes and contact your state banking department (either online or via phone). They typically can tell you if there are any consumer complaints filed against any lending institution in your state. Ask if the complaints are open or pending, or if they have been satisfied.

Following the above will help you lay the initial groundwork in getting the best mortgage available for your situation. Do your homework and do not allow yourself to be misled.

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