Taking out a mortgage loan might be the biggest financial decision you make in life. A decision of such magnitude demands thorough research from your side, since it will have a huge impact on your financial plans for the future. You may be opting for a new mortgage loan to buy a residential or commercial property or thinking of refinancing your existing mortgage. By the time you have read through this Buzzle article, you will know what to look out for when shopping for a mortgage loan.
About Mortgage Companies
There are hundreds of banks spread all over USA, offering mortgage loans. Scanning the loan offers made by each and every one of them can be an exhausting job for anybody. Mortgage companies make it easier by acting as intermediaries or brokers between lenders and borrowers. Some mortgage companies themselves lend money and broker deals from other lenders, while some are purely devoted to brokerage.
By evaluating the financial status, requirements and credit score ratings of an applicant, a mortgage firm presents the best mortgage loan offers made available by various lenders. The company charges fees for the research and brokerage services it undertakes which are classified as loan processing costs to be paid by the applicant. Let me outline the things to consider, before choosing a mortgage company, in the following lines.
Effectively Comparing Mortgage Companies
If you have decided to go through a mortgage company for a loan, make sure that it's the best option. Here is a criterion for choosing mortgage companies by comparing all their features and services offered.
Track Record and Reputation
Ask around and browse through finance magazines, newspapers and classifieds for the top mortgage companies operating in your area. Inquire about the track record and reputation of the companies by contacting any of its former or current customers. Look for a mortgage company with a consistently good performance, that has been known to bring in the best mortgage deals for its customers. You can know a lot through your personal contacts and your friends circle.
Quality of Credit Counseling Service
Most mortgage companies offer credit counseling services to loan applicants, to determine the best course of action for them. Inquire about the quality of credit counseling service offered by the mortgage company and if you can, get in touch with them personally.
Points and Interest Rates Offered
Get information about the interest rates, repayment period and points offered on the loan options presented by these companies. Inquire about whether the loans offered come with a fixed or variable interest rate. In case, it's the latter, know about the factors on which the changing interest rate will be dependent. A loan applicant can buy points from the lender to lower the interest rate. Know about the fees charged for the points and the clauses related to it.
Down Payment and Mortgage Insurance Clause
Know what are the down payment and mortgage insurance clauses on the loans offered by any mortgage company. Look for companies that offer loans with low down payments and interest rates. Inquire whether the lenders require you to purchase a mortgage insurance along with the loan. An insurance will add up to the cost of the loan.
Processing Fees and Other Charges
There are several fees which the mortgage company charges for processing the loan, which includes underwriting fees, closing costs, brokerage fees and other miscellaneous fees. Know the details of all these fees charged by the brokerage.
Compare all Factors Before Choosing
Shortlist the best mortgage companies you come across and narrow down to one, by evaluating them on the basis of all the above factors. Do the math and determine which company could offer you the best deal overall.
These were the essential points which every borrower must consider before opting for a mortgage loan deal. Most important factors are the interest rate offered on the mortgage, the repayment period and the fees charged for loan processing. After carefully comparing mortgage companies on the basis of all these factors, choose the most reliable brokerage which can offer you the most reasonable mortgage loan deal and adequately satisfies your financial requirements.