Mortgage Finance-Tips to Save You Serious Money (Part One)
For almost every American who is considering being a homeowner the purchase of the home with a mortgage is the single biggest purchase of their lives. With home prices averaging close to 0,000 in 2006, depending on the rate and the terms of the loan you can expect to pay 0,000 or so in interest over the life of the loan-that is close to 0,000-NOW do I have your attention?
The very first thing for you to remember when you are buying your home and buying your mortgage- is just that- you are the buyer. Someone else is selling you on something-the house, the loan, etc. So in a sense it is no different from buying a car or any other big purchase. You wouldn't buy a car without doing some homework would you?
The "salesman" or mortgage broker, banker or whatever title he goes by is usually a commissioned salesman who makes his money off of the rates and extra charges he can get you to pay. So that is tip number one.
1. NEGOTIATE the closing costs. The lender is making more money than the loan itself. For example, on a 0,000 loan the interest will be in the 5,000 range depending on the rate and term of the loan. Closing costs are almost always negotiable. In any event you should get a full disclosure of what your closing costs will be right at the beginning of the negotiations. If not head for another source.
2. NEVER give a payment you can "live with" to your salesman. Like the car business, where the salesman asks what kind of payment you are looking for, once he has that he can manipulate the figures to make it work.
3. SHOP for a mortgage broker/mortgage banker. Remember that your real estate agent is there to sell homes and part of that process is getting you approved for a loan. The mortgage broker is there to make loans to people who want to buy homes. Often there is a connection. Do your own due diligence on finding your money man. Ask friends, relatives, etc. Start with a member of the National Association of Mortgage Brokers (NAMB).
About the Author: Your quest for the BEST deal on a home loan starts with knowledge and information-you can't have too much of either.
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