Most Important 2 Steps to Get the Best Mortgage
By: Diane Tuman, Zillow Content Manager | November 14, 2007
Today’s Wiki Wednesday Feature: Most Important 2 Steps to Get the Best Mortgage
Just two steps to finding the best mortgage? Now that’s the kind of article that fits into 
anyone’s overtaxed and overburdened life — especially when buying a home. According to attny54 and his article, “Most Important 2 Steps to Get the Best Mortgage,” the two most important things you can do are:
1. Obtain information from several types of lenders
2. Shop, compare and negotiate
Although the headline makes it sound like a breezy, 30-second article, it’s in fact chock-full of good advice and tips when dealing with lenders such as:
- Ask each lender and broker for a list of its current mortgage interest rates and whether the rates being quoted are the lowest for that day or week.
- Ask for points to be quoted to you as a dollar amount—rather than just as the number of points—so that you will actually know how much you will have to pay.
- Ask if the lender or broker will waive or reduce one or more of its fees or agree to a lower rate or fewer points. You’ll want to make sure that the lender or broker is not agreeing to lower one fee while raising another or to lower the rate while raising points.
I realized while reading this article — especially the last bullet point above — that if you replace the word “lender” with “car dealer” you’re essentially going through the same exercise of trying to get a product (loan or car) for a reasonable price without getting hit with hidden costs and charges being moved from one line item to another. Clearly, however, purchasing a home is a much larger undertaking.
Ed: Wiki Wednesdays is a weekly feature that highlights helpful or interesting articles from the Real Estate Guide.
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Comments
10 Comments so far
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Terry Lamb on November 14, 2007 11:42 pm
I just wanted to add that most borrowers start focusing on the interest rate and forget the most important things like learning how to use the good faith estimate for the tool that it is or have a scripted request when calling a mortgage broker. Asking for a specific loan type and points or no points is a good start.
max on November 15, 2007 8:39 pm
i guess, it’s not that simple!
max
http://www.nycmortgage.us
Keith Bailey on December 8, 2007 1:21 pm
Even more important than the advise above… use multiple loan brokers and make them compete to sell you the same product. A broker that says “I represent all the lenders and I can find you the best deal” is misleading you. Brokers add their fees and points to the price the lender is selling the loan for… so if you only go with one broker, you are having the same high fees added to all the loans the broker is selling you.
Nick at First Home Furnishing on December 11, 2007 12:54 pm
The key is research research research, always check on all fees especially now that the credit crunch is hitting lenders hard. A great example is to compare those with fixed fees against those charging a percentage, mostly the fixed fee will be preferable to hefty 2.5% ‘arrangement fees’ that seem to be everywhere now.
Lee Matthews - Financial Concepts West on December 19, 2007 4:15 pm
The most important thing is to obtain a Home Equity Line of Credit (HELOC) in conjuction with a Mortgage:
Today’s Real Estate market means that folks can no longer count on appreciation to build home equity. Those who realize that they need to pay down their current mortgage debt are looking for alternate ways to aggressively (yet safely) build equity.
And they’ve discovered a perfect online system to do that; they can focus on their wealth accumulation goals while accelerating their equity simply by using a HELOC to ‘power’ this ‘financial solutions’ program.
A typical 30 year loan (of whatever type) can be paid down in 1/3 to 1/2 the time — it’s a great way to save *huge* amounts of income by eliminating a mortgage amortization front-end interest load. (On a million-plus dollar home, I’ve personally seen where this particular program will save the homeowner $750,000 in interest charges!)
And the best thing – homeowners don’t have to refinance their existing mortgage or make (little or no) adjustments to their lifestyle.
I’d be happy to provide further details…
Rick on December 28, 2007 7:35 am
The 2 most important things that homeowners should do is:
1) research
2) read the fine print
Many do not read the fine print and just sign up without realizing the implications. It is always important to understand the terms & conditions in your mortgage agreement.
Rick
http://www.findsomethingnow.com
susan on December 28, 2007 12:17 pm
I am not sure where Zillow gets their estimates on homes. In my case, I live in Antelope, CA 95843 7838 firestone, which actually is 5249 Marbury way, our house faces Marbury not Firestone. We have a huge lot, and the second largest model in this subdivison, our home is 2468 sq, ft. and we also have a pool and many upgrades including front and back landscaping, so, you have us priced right now at $379,564 yet you have the 2000 sq ft home across the street on a very small lot at $500,000, not sure what that’s about, also, I checked the homes on your map that are the same floor plan as mine only no pool and smaller lots they all are valued higher than our home. May I add, I am a real estate agent, I am fairly new in the business but know our particular area very well and I feel your estimates are off somewhat especially when you put a $500,000 price on the smallest home and tiny lot and $379 on our home which is much larger and huge lot?
Lee Kendrick on December 29, 2007 2:50 pm
Great information! I’ll definitely visit your blog more often.
Thanks & keep up the greatb work!
Lee Kendrick
http://leekendrick.com/blog/
Drew Meyers on January 2, 2008 2:31 pm
Susan-
“put a $500,000 price on the smallest home and tiny lot and $379 on our home which is much larger and huge lot?”
Please read this thread — there are likely differing home facts leading to the differing zestimates. Zestimates are based off of public facts, though we will soon be using owner-edited facts as an input if they are available.
Please also check out My Estimator.
Minnesota & Wisconsin Lake Property on January 17, 2008 7:24 pm
One should need to memorize these two steps.