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Five Ways to Compare Mortgage Companies

Finding the right mortgage for your new home is a big decision, so here are five factors to help you understand which company will work best for you:

1) Fees and Interest Rates

You should always make sure that the fees are appropriate and the interest rates are affordable. Nobody wants to pay fees that they shouldn’t be paying or have an interest rate so high that they can’t afford the mortgage payments. Also, do not be afraid to ask your lender to explain anything that you do not understand on the good faith estimate.

2) Ability to Meet Your Needs

Research whether or not the company has programs that cater to your individual needs, such as low credit scores or low down payment programs. You will need to know whether or not you have poor, good, or excellent credit, as your score will ultimately determine whether or not the mortgage company will give you a loan.

3) Variety of Loan Programs

A good mortgage company will have programs for people that are considered low and high risk. You can check with several different companies to see if they provide helpful loan products such as FHA, VA, and rural development loans. A good mortgage company should also be able to tell you whether a government or conventional loan is right for you.

4) Level of Customer Service

When talking to mortgage companies you should evaluate how the lender treats you as you go through the application process. Do they make you feel comfortable and at ease with providing them your personal information? Are they rushing you and not answering all of your questions? You should always go with your intuition and never choose a mortgage company just because they say that you are approved.

Typically if you get one mortgage company approval, then you will probably be able to get approval from another company, so do not settle on a mortgage company who does not make you feel good about getting a loan from them.

5) Reputation

Find out whether or not the company is reputable. One great way to select a reputable mortgage company is to get referrals from family, friends, or co-workers who have worked with companies that you are thinking about doing business with. You can also search the internet to find out if there are any consumer complaints or lawsuits pending against mortgage companies so you will know who to stay away from.

Online Mortgage Calculators

An online mortgage calculator can be one of the best and easiest ways to help you calculate your various mortgage expenses. It will help you determine what combination of elements must come together in order for you to get the best home loan for your financial situation.

When using a mortgage calculator, keep an eye on the interest rate and the term length you enter as these will greatly influence your results.

Also keep in mind that while a mortgage loan calculator gives you a quick overview and is great for comparing lenders, there are several other factors that will affect your quotes, such as your credit score. So don’t be surprised if you are quoted a slightly higher amount after talking to your lender.

A lender will always provide you more accurate information after considering your current financial situation, including up-to-date interest rates and loan programs. So don’t rely on a mortgage calculator by itself.

Don’t Miss Out on Real Estate Foreclosures

Today’s marketplace offers many property investment opportunities, especially with the dramatic rise in foreclosures. Real estate foreclosures can now be purchased for pennies on the dollar and come in a variety of homes and price ranges (and even timeshare properties).

Low Prices

While the location and nearby amenities will play a role in the overall price of any property, with the current economic downturn, an investor can purchase these properties for a substantially cheaper price.

Typical determinants of price, such as square footage, construction, decor, and property size may not play a role at all in a foreclosure purchase. More often the price is based on what is still owed on the original mortgage rather than its real value.

Variety of Properties

So if you have ever considered purchasing a home, there could never be a better time to invest than now. Prices are at an all-time low, interest rates are extremely low, and high dollar properties are being sold off for substantially less. And with the ever-increasing number of foreclosures, you are sure to quickly and easily find something that is just what you are looking for.

Know Your Credit Score

If you’re looking into purchasing your first home, one of the very first things you should look at is your credit score. While the amount of money you make is very important, and the size of your damage deposit will matter, a poor credit score will sink your mortgage application faster than any other problem. Nothing else matters quite as much as your credit score; even a high-paying job can’t help you if you are a risk to lend to.

If you do have poor credit, there are ways of improving it, prior to applying for a mortgage. Make sure that all of your bills are paid on time, including your credit cards. If you need more help, talk to a credit specialist, and see if they can recommend ways to improve your overall score.

This sort of thing will take some time to see results, so the best time to worry about your credit score is not when you want to buy a house, but years sooner. Keep an eye on your credit at all times, and work to remove any negative reports. That way, when you decide to look for a house, your credit report does not keep you out in the cold.

Finding a Mortgage Broker

All right, you want to buy a home. You have decent credit, very few debts, and no outstanding bills. You have a good job that pays well, with a decent employment history to review. You have the money for a down payment… you’ve got it all, right?

Nope. You need a mortgage broker.

A mortgage broker will be able to take the information you give them, and turn that into a pre-approval. They will walk you through the process of finding the right mortgage for you, signing all of the paperwork and providing all the documentation required. They will help you every step of the way and make sure that getting the mortgage does not interfere with your plans to find the perfect house.

Where can you find a mortgage broker? You can check online, but the best resources are the people you know – friends, family and co-workers. Ask around, and see if anyone recommends the broker that they used. A personal reference is much more reliable than an ad on a website or a listing in the yellow pages. And of course, if the broker is any good, you can then recommend them to your associates when the time comes for them to find a home.

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