I'll take a shot at this one
Overall the obvious answer is to shop 2 or 3 places for the best rates. You don't want people pulling credit over and over, so be aware of your income #'s, credit scores, downpayment and a general purchase price. That way you can talk to several lenders without having them pull credit....Although, if someone has good credit, pulling it a few times should not effect the score that much.
Here are a few tips:
1. Determine your needs: Decide if you should get an interest only loan, and ARM or a fixed rate. If there is any chance that you will not live there forever, you may refinance down the road, consolidate a 1st and 2nd from the purchase or eventually "move up" have kids; I strongly recommend an ARM. Watch the market or read the newspaper to see where the market is.
2. Points can sometimes be helpful: If a lender is going to charge a point, it typically means you are "buying down the rate". A point is simply pre-paid interest. 1 point would be 1% of the loan amount (not purchase price). Paying a point or so, may indeed get you an incredible rate. Make sure you compare with different lenders. Also, consult your tax accountant as the whole point should be tax deductible the first year.
3. Broker is not a dirty word: Remember that companies like Countrywide, Bank of America, Ameriquest, and Wells Fargo (too name a few) have a ton of overhead. The retail market usually carries an inflated rate or fee. A broker can usually offer better rates. BUT, make sure they are "purchase savvy".
4. Get organized: There is nothing worse than dealing with a borrower who is buying the home of his/her dreams and they take his/her sweet old time getting documents to the loan center (ie. W2's, paystubs, Homeowners information, bank statements etc). Speed bumps occur all of the time when getting approved for a loan, but work with the mortgage company to overcome the issue in a timely manner.
These are just a few suggestions. I am sure everyone has his/her own philosophy, but here is the bottom line. Some consumers are so worried about getting screwed, they dilly dally around and eventually end up screwing themselves for waiting. Lock the rates if you feel comfortable with your loan proposal.
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