When you are buying a home or refinancing, you want to get the best deal on your mortgage, and you want to make sure you get an equally good interest rate. Well, how do you do it?
In today’s post, we will discuss three quick tips on how to get the best mortgage rates on your mortgage and to make sure to get the best overall deal on your mortgage.
Understand the Mortgage Fees
When you start the conversation with a lender and apply for a mortgage or a refinance, the lender will provide you with something known as a worksheet or a loan estimate.
In this loan estimate, 98% of the costs that they are estimating they do not control. So the first thing to understand is that it doesn’t matter what a bank or lender shows you on a loan estimate as cash to close.
The reason behind it is the banks, lenders, or mortgage brokers are under pressure to estimate the lowest closing costs as possible.
So the only thing that matters when you pick out a lender is the interest rate and the lender fees when you are evaluating the costs. Lender fees usually include processing fees, admin fees, underwriting fees, etc.
They are going to be listed at the top. You are eventually going to pay those fees and will be added to your cash to close.
Some lenders or brokers say that they do not charge these fees.
Well, in such cases, you might want to check what is the interest rate they are offering as they might cover these fees by giving you a slightly higher interest rate.
Get A Feel of the Current Interest Rates
Every single borrower is asking the same question, how do I get the best interest rate? To begin with, you need to understand that banks, lenders, and mortgage brokers are going to pray that you ask that questions.
Because they know the numbers better than you do. When you see a low-interest rate advertised either on TV, newspapers, or flyers with fine print that you probably ignore or miss reading.
Those are the conditions and extra fees and costs to get that particular rate. The easiest and the best thing to do first is to get an idea of what the current interest rates are.
Researching the market rate would help you to understand better which of the lenders or mortgage brokers are helping you to get best mortgage rates.
If any lender is offering you an interest rate way below what the market is at, they are either referring to a different mortgage program or indirectly asking you to pay points to get that rate.
When you are shopping for a mortgage, you always want to get best mortgage rates and the lowest possible closing costs.
Work Towards Closing
Once you understand the fees and how to get best mortgage rates, you want to make sure you are working with the lender who will get your loan closed.
Many companies are not so focused on who closes or who closes on time, and that can get expensive.
That could lead to contract extensions, rate lock extensions. In such situations, what you can do is, instead of looking at the company, look at the person you are working with.
The individual loan officer is the one who will dictate how the loan process goes for you.
You can google the name of the loan officer that you are working with to make sure you get more information like reviews, history, and experience.
The best thing about researching online is, if you are not doing a good job, you can’t hide.
So, make sure the loan officer that you are working with is dedicated enough to close your loan on time.