Find a lender with a history of doing business with your agent. The relationship between the lender and your agent can help you get that loan program that best suits your financial circumstances. If they have established a good business relationship previously, then they can work as a team and help each other achieve their goal, which is to get you that loan that works for you.
If you are a home buyer who does not know how to go about with the whole home buying process, all the paperwork could be very intimidating and confusing. Ask for your lender's or agent's assistance. They can give you the information you need in order to make a sound decision.
There are a lot of loan programs that lenders have for your mortgage that you can evaluate together with the lender and your agent, before choosing which one is best for you. Take time to study these options and don't just commit to what the lender presents to you without evaluating the other options first.
If there is something that you don't understand about anything in the whole home-buying process, do not hesitate to ask. Have the lender or your agent explain all the terminologies that you don't understand. You are bringing them business, so catering to you is part of their service. Do not agree or commit to anything without understanding everything. Some lenders or agents who are only after their own interests may use big words to try and confuse you into agreeing, but a good lender or agent will take time to explain what you do not know. Knowledge will protect you from making innocent mistakes that you will pay for in future.
Lending is a business, so lenders are keen on making business with you. Examine all available options before making a decision and try negotiating. If you have a variable rate loan, you may be able to negotiate to a fixed loan.
To listen to the average person discuss their mortgages, you would think that the only thing that influences the total cost of their mortgage is the rate. You've heard it, at parties, at over the fence conversations: "What rate did you get on your mortgage?" "I got a mortgage rate (taux hypoth?caire) of ____%". Yet studies have shown that, given the same parameters (credit history, length of mortgage, payment terms, etc), the average difference between mortgage rates is about .06%. On a $100,000 mortgage, that amounts to $41.12 per year.
We all know by now that interest rates charged on mortgages (pr't hypothecaire) and all other types of loans are determined by credit ratings. Why, then, with all the discussion about credit ratings and credit scores, are we still so na've as to believe that one banker will look at our credit rating and say 7%, and another will look at that same exact credit rating and say 6%? Credit ratings are based on the risk the bank faces when it lends money to you (and, more importantly, the risk it faces about whether it will get paid back). There is a higher premium over their cost of funds if they risk that you will pay slowly or not at all, and a lower premium if you are a good risk. As a result, the range of rates, based on the same type of credit rating, is very small. It hardly seems worth the trouble to save such a small amount, does it? Especially if you, like most people, look all over the internet for hours to find out all of the rates that are being offered out there.
The only way to have a real savings on your mortgage is to have an overall mortgage strategy. There are many types of mortgages (hypoth?que) being offered, and the combinations of benchmark rate used, terms of payment and duration of loan can have a lot of influence on the loan over time. This is what is more important to look at. Finding the mortgage professional who will discuss more than just the interest rate, but instead will understand the economic markets and examine your own situation and longer term plans will yield much more savings on your mortgage. Choosing the right mortgage strategy can save you tens of thousands of dollars, as compared to the $40 cited above that can be saved on a lower interest rate.
How can you find out the best strategy? Working with a mortgage broker (courtier hypoth?caire) who understands the economic markets, who works closely with you, who understands your needs and unique situation, and who combines this knowledge and information with the best rates available is the secret to finding the right mortgage strategy. Understanding this concept can save you tens of thousands of dollars in mortgage costs, rather than tens of dollars.
If you want to understand more about this kind of an idea, continue on to the main article.
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