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There are thousands of mortgage
lenders across the country, each with many different loan
products. From lenders that will only sell to the most creditworthy
borrowers (at the best interest rates), to lenders that will
lend 50% of a property's value (at high interest rates), there's
a mortgage product for just about everyone.
Banks
One place to check is your local bank. This can result in
a reasonably good deal for the qualified customer. In many
other cases, the bank will not have a program that fits your
needs, or you may fall outside the guidelines of its lending
ability.
Once you have visited your bank, look in the real estate section
of your local paper for the rates at other banks. It's a good
idea to start the legwork on your own, before bringing in
a mortgage broker, so that you'll 1) avoid the hard sell from
the get-go, and 2) have a better idea of what you could find
on your own.
The Web
The Web lets you comparison shop, right from the comfort of
your own computer. Not only that, but you don't have to hunt
down a hundred different banks -- certain aggregator sites
have done that for you. In fact, you might check out the loan
services provided by our Home Center sponsors, which can be
found on the main page of our Home Center. Each of these companies
can help you shop for the lowest mortgage rates.
By the way, there is no reason why you shouldn't take out
a loan with a bank in California if you live in Virginia,
or vice-versa.
Real Estate Agents
You might well find the cheapest rates in town (or in the
country) on the Internet. If, however, you end up working
with a real estate agent, you might feel more secure with
a lender that has a relationship with your agent. The idea
is this: The agent brings business to the lender, so the lender
has some sense of responsibility toward honoring commitments
with that agent's clients. There are, to be sure, legal protections
for you, but a hassle is a hassle. This is not a reason to
get a lousy deal, but, as Mr. Freud said, psychology counts.
(OK, maybe he didn't say that, but he should have.)
When should I shop for
a mortgage?
Ideally, you should find a lender and get "pre-qualified"
for a mortgage before you ever start looking for a house.
Not only will you feel more confident knowing that you'll
have a certain amount of money (which can also narrow down
your price range for potential houses), but you'll be a more
serious candidate to sellers.
What information should I get from the mortgage company?
There are many questions to ask prospective lenders. You might
find yourself feeling a little nervous. After all, you can
feel like they have you by the... suspenders. But, don't think
of it that way. You are going to pay them a lot of money for
a very long time. They serve you, not the other way around.
Don't let them take advantage of you or bully you into a deal
that isn't to your advantage.
See our worksheet for lenders. Print it out and take it with
you when you meet with a prospective lender. |
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