How to Get the Best Home Mortgage Loan Deal

The right mortgage Lender/Broker and the most economical home mortgage loan

Purchasing a home is a long-term investment - one that can build your wealth. With a transaction of this importance, you need to do your homework before selecting a mortgage lender or broker and a type of home mortgage loan. Choosing the right mortgage lender and the terms of your home mortgage loan can positively impact your wealth in the long run. Here are some tips for choosing the right mortgage lender and home mortgage loan.

Getting the best home mortgage loan deal

Once you know what each mortgage lender or mortgage broker has to offer, negotiate for the best deal that you can. On any given day, mortgage lenders and brokers may offer different prices for the same home mortgage loan terms to different consumers, even if those consumers have the same home mortgage loan qualifications. The most likely reason for this difference in price is that mortgage brokers are often allowed to keep some or all of this difference as extra compensation. Generally, the difference between the lowest available price for a home mortgage loan and any higher price that the borrower agrees to pay is an overage. When overages occur, they are built into the prices quoted to consumers. They can occur in both fixed and variable-rate loans and can be in the form of points, fees, or the interest rate. Whether quoted by a mortgage broker or loan officer, the price of any loan may contain overages.

Working with a mortgage lender or broker

Have the mortgage loan officer put all of the costs associated with the home mortgage loan in writing. Then ask if the mortgage loan officer will waive or reduce one of more of its fees or agree to a lower rate or fewer points. You’ll want to make sure that the mortgage loan officer is not agreeing to lower one fee while raising another or to lower the rate while raising points. There’s no harm in asking mortgage loan officers if they can give better terms than the original ones they quoted or than those you have found elsewhere.

Once you’re satisfied with the home mortgage loan terms you’ve negotiated, you may want to obtain a written lock-in from the mortgage loan officer. The lock-in should include the home mortgage loan rate that you have agreed upon, the period the lock-in lasts, and the number of points to be paid. A fee or deposit may be charged for locking in the home mortgage loan rate. This fee may be refundable at closing. Lock-ins can protect you from home mortgage loan rate increases while your loan is being processed; if home mortgage loan rates fall, however, you could end up with a less favorable rate. Should that happen, try to negotiate a compromise with the mortgage loan officer.

The difference between a mortgage broker and a lender

A mortgage lender provides the borrower with money whereas mortgage brokers don't lend. Instead, mortgage brokers act as independent contractors that offer the loan products of multiple lenders.

A mortgage broker counsels customers on the types of loans available from different lenders and the loan qualification process as well as accepts the borrower's application and processes the loan. Once the mortgage broker has compiled all of the information about the loan transation, including credit report, approasial, and verfification of employment and assets, it's passed to the lender, who actually funds the loan.

Because mortgage brokers have relationships with multiple lenders, they can shop for the best loan terms, but an unscrupulous mortgage broker can easily add profits to your total costs. Mortgage brokers also have relationships with lenders who specialize in various market niches such as loans offered to those with poor credit ratings.

Baron Mortgage Corporation can act as a morgage lender or a mortgage broker in most states, depending on the transaction.

Shop around for the best home mortgage loan

When buying a home, remember to shop around, to compare costs and terms, and to negotiate with the mortgage loan officer for the best deal. Your local newspaper and the Internet are good places to start shopping for a loan. You can usually find information both on home mortgage loan interest rates and on points for several mortgage lennder and brokers. Since rates and points can change daily, you’ll want to check your newspaper often when shopping for a home mortgage loan. But the newspaper doesn’t list the fees, so be sure to ask the mortgage loan officer about them.

The law is on your side

The Equal Credit Opportunity Act prohibits mortgage lenders or brokers from discriminating against credit applicants in any aspect of a credit transaction on the basis of race, color, religion, national origin, sex, marital status, age, whether all or part of the applicant’s income goes from a public assistance program, or whether the applicant has in good faith exercised a right under the Consumer Credit Protection Act.

The Fair Housing Act prohibits discrimination in residential real estate transactions on the basis of race, color, religion, sex, handicap, familial status, or national origin.

Under these laws, a consumer cannot be refused a loan based on these characteristics nor be charged more for a loan or offered less favorable terms based on such characteristics.

The right mortgage loan officer and the right home mortgage loan make all the difference. Be sure to do your research, choose the most service-oriented, trust-worthy mortgage lender and shop around for the best home mortgage loan rate. Get everything in writing from your mortgage loan officer, and use the above information to negotiate like a pro.