Consumption and Real Estate
How do I get the best deal on a mortgage? What kind of questions should I be asking the mortgage broker?
Question : How do I get the best deal on a mortgage? What kind of questions should I be asking the mortgage broker?
My partner and I are first time home buyers. We have saved almost 20% of the property and both have secure well paying jobs. Unfortunately we do not know much about mortgages and want to get the best deal possible. Should we see more than on broker? Should we get our own mortgage quotes as well? Do we have to pay trailing commissions?
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Best answer:
Answer by gabriele
Hello, do as much research as you can – brokers are great if you don’t have the time but if you do you are far more likely to understand what you’re getting into and find the best and most suitable product for you. These days, it’s so easy to get information from multiple banks – I’d recommend calling rather than going online as they can ask you questions about your specific situation and make recommendations, the information on the internet is onlyn broad.
You don’t have to pay any commissions to brokers – this is all paid by the banks. They pay an upfront commission then an annual trailing commission for each year you have the loan with them.
With your substantial deposit as well as strong employment you are also in a good position to negotiate with the banks – don’t be afraid to do this, you are stuck with this loan for a long time so spend the time now getting it right!
Be careful with what broker you choose – if you have to go with one only go with the mainstream broker companies (eg mortgage choice), there are some dodgy ones out there and lots who will just sign you up and then you’ll never hear from them again. To be honest you’ll often get the best deal going direct through the bank – they have more specific knowledge about their own policy/procedures whereas the brokers only have basic knowledge of maybe 10 – 20 different banks.
If you are borrowing over $ 250K, look for a package – this will involve an annual fee but the cost for this will substantially outweigh the costs saved in interest rates and fees on your home loan as well as all your other banking.
This site may help you to compare many mortgage companies at once http://easymortgageadvisor.blogspot.com/ fill the form and you can get a free quote from top banks, brokers and mortgage lenders
Good luck! Remember, the more research the better. Don’t just trust one specialist – if you are fully educated and informed then you will be the best specialist on your particular financial situation.
Hope this help,
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#2 written by Cat 1 year ago
Thankfully banks and other lenders are under strict scrutiny, making them not want to screw anyone over with too good deals that fine print is hidden on. However, this does not mean that you shouldn’t research information on your case to better protect yourself from lending predators. See how other people have tackled your similar situation and see what you can learn from their mistakes.
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#3 written by Ralfcoder 1 year ago
If you’re in the US, I’d recommend you look at getting a mortgage from a credit union. If you’re not a member of one, find one and join. The rates are usually a bit better, and the service is often better, too. It’s true when they say that you’re part of the CU family.
There are a lot of mortgage calculators out there. Do some searches and see what you find. They can tell you payment amounts for a certain principal borrowed at a given interest rate. They should be able to factor in the cost of insurance and property taxes, too.
I’d also recommend that you avoid any of the gimmicky loans. Don’t get an ARM – adjustable rate mortgage, and don’t get a balloon mortgage (where you make payments for say 5 years, and then the entire balance is due in one payment) unless you KNOW you won’t be there for any longer than that.
You’ll probably have the option of buying “points” on your mortgage. This is where you pay additional money up front, and in return get a lower interest rate. It’s essentially prepaid interest. If you ever had a finance class, you may have seen that term. I’ve never bothered with it, but you should ask how it affects your situation, and whether it’s to your benefit to do this.
If I was in the market for another mortgage, I would go for the typical 30 year fixed rate mortgage, with an escrow account to hold insurance and tax payments. It’s convenient, and there isn’t any extra cost associated with it. If you can afford the higher payment, you can usually get a 25 or 20 year variation of this, or even a 15 year, and usually get a discount on the interest rate, too.
Keep in mind that if you go to a mortgage broker, your mortgage can and probably will be sold. We had one mortgage that got sold twice. The terms must stay the same when this happens, and the only difference to you will be that the payment will be sent to a different company. Also remember that as market conditions change, you can always refinance. This is where you go get a new mortgage at hopefully a lower interest rate, pay off the old one, and save some money in the monthly payment.
Remember that your payment can and probably will change as the property taxes increase over time. Your mortgage holder will contact you with the new payment when this happens. They may want you to make up the difference right away, or they may pay it themselves, and just increase the payment to cover the loan they’ve effectively given you.
You should be able to come up with questions for the mortgage broker from most of my comments here. These will help you clarify the deal. I hope they help you decide on who to go with.
Good luck with your purchase. It’s scary to look at the numbers you’ll see here, and to realize that you’re committing yourself to spending a lot of money. But it’s usually worth it in the long run.
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#4 written by Rebecca 1 year ago
The other answer is great but I just add this, go see an Atty before signing the paperwork for the loan and let he/she write up an agreement between you two stating EXACTLY what will happen in a breakup. YES it happens and if you want to read more just go through a few of these post and you will see the consequences of NOT doing this from the get go. PLEASE do not skip this step or it may come back to haunt you in a big way!
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Oh boy! There is a lot to learn about when it comes to mortgages. Unless you are a finance whiz you want to get educated. There are some free resources out there but they don’t get deep enough into the nuts and bolts.
When you talk to a mortgage broker, they are compensated by the mortgage product they sell you. They get extra compensation for pre-pay penalties, points, etc.
You should get educated first, then interview mortgage brokers and bankers. First get a copy of your credit report here: http://www.creditreport.com/index129.aspx?src=cj&cid=374&tid=68274881&kwd=txt There is a FREE trial.
Then learn all the different types of mortgages and mortgage lingo.
Here are some links that can help you out: http://www.mortgageloantips.com/home.html?hop=vip2010re
You will be able to avoid a lot of junk fees that mortgage brokers don’t want to tell you about.
Then get educated of the market and your area. This service has a FREE trial that you can check out. http://www.realtytrac.com/pub/landing/landingmedia.asp?optimized=3&StateSel=&accnt=12494
The more educated you are, the better decision you will make and feel good about it. Let me know how it goes.