Save Money With A Great Loan Rate
If you've decided to apply for a new loan, the Internet is the best place to
get one. Loan rates are usually about 0.25% lower (which can translate to
thousands of dollars over 15-30 years) and it's a much more
convenient and pressure-free process. Customer service isn't bad;
you can almost always reach someone by phone or Email, and sometimes by
online "live chat" too.
Direct lenders such as CountryWide
are usually the best places to go if you want the lowest possible mortgage
rate. Sites such as LendingTree.com will try to connect you with three
or four different lenders so you can choose between multiple offers, but
the trouble with that business model is that you don't know whether you're
being connected with four low-cost lenders, four high-cost lenders, or
something in between.
Alternatively, mortgage brokers often have access to many different lenders, so they can
be of great help in finding the best loan for your particular
situation. The trouble with mortgage brokers is, they may be well-paid by a
lender to recommend a loan that isn't the best one. This means that you'll
still have to shop around, whether or not you use a mortgage broker.
The best strategy is to seek multiple loan offers from direct lenders.
Here are some ways you can reduce the real cost of buying and financing
a home:
- You can often buy and finance a home more cheaply if you buy in the winter
"slow season," from December to February. This is especially true in areas where the winter climate is
unfavorable. In cities like Phoenix where many people leave in the
super-hot summer, it's better to buy a home at that time. Winter is a very good
time to refinance your home, because bank fees will often be reduced during
winter by $250 to $500.
- A BankRate.com home-buying article says that you can "buy a house and
get some of the real estate agent's money." Online real estate sites provide in-depth information and
easy shopping, and they can really cut down on overhead so they can pass on
significant savings to their customers.
- A closing costs article at the Dollar Stretcher says that you can often avoid
paying many closing costs, if you're alert and you have good credit.
Loan origination fees, application fees and appraisal fees are often
negotiable. You should usually decline to pay Processing Fees, Underwriting Fees,
Wire Transfer Fees and Funding Fees, because these fees are often overhead
costs that the lender is passing on to you!
- You can get "preapproved" for your mortgage loan, rather than just
"prequalified." You'll need to pay a $20 to $50 fee, then fill out a loan
application and provide supporting paycheck stubs, bank statements
and W-2 forms. Sellers who are in a hurry may accept a lower bid from
a preapproved buyer because the deal is more certain to go through.
- You can sometimes arrange for lower monthly payments at the
beginning period of the loan.
You can do this by obtaining an adjustable-rate mortgage, which initially has
a lower interest rate. Another possibility: "builder incentives".
The home builder may offer you a few thousand dollars to use as a downpayment on your mortgage.
- You can use "rate locks" to make sure a loan rate doesn't change.
You can then take a few months to look for more competitive loans.
Short-term rate locks (around 60 days) are usually free, but
you'll have to pay from 0.25% to 1% of the amount of the loan for
a long-term rate lock.
- After you've financed your home, remember that you can deduct some
loan fees from your taxes, such as commissions, closing costs, penalties, loan fees,
"paid points," and of course mortgage interest.
Here's how to use direct lending sites to get a low-rate loan:
| |
|
|
| |
Save Money With A Great Loan Rate 
|
Time to complete:
| A few days to get approved |
|
Money you'll spend:
| $0 |
|
What you'll get:
| A low loan rate. |
Step-by-step instructions:
- Visit some direct lenders, for example
FullSpectrumLending.com
 which is run by CountryWide. A
new window will open with each click.
- Go to some other sites to get other mortgage quotes, then select the
best deal.
|
Further Reading:
|
|  |
|
|
|
Copyright (c) 1998-2007 Ark Royal Software.
Legal Notice, Disclaimer and Terms Of Use
|
Read this 
