Steps Towards a Smooth Closing.
Everywhere you look, you will be inundated with ads advertising that this particular mortgage lender has the best rates and terms for you. You obviously can’t believe that every one of them have the lowest rate, so you have to make sure the rate is not just a come on.
If you want to avoid being fooled by such ads, be sure you know the lender well. If the mortgage company or broker is one that is not familiar to you, make sure you get all of their details. You can get a lot of information from the Better Business Bureau and the State Banking Commission.
Make sure the lender has experience with your particular kind of mortgage. Discover how long they have been in business and how long the broker you will be working with has been in business. Experience in closing thousands of home loans can make a difference when you close your loan.
Learn much as you can. As much as the internet has overloaded us with information, it has at the same time made it easier to get the information that we require. But if you know which types of mortgages are available, and which are the best in your own circumstances, this knowledge will be helpful. It is best to make a thorough list for comparison purposes.
Another factor to consider is who the rates you are quoted apply to. You may see some great rates, but only people with absolutely top notch credit ratings are going to get those rates. Find out what those premiums are so you are comparing rates that will apply to your loan.
After you make up the list, you can see which ones meet your criteria. Remember the old saying, if its too good to be true, it probably isn’t. If all of the 30 year loans you are getting quotes on are within a 75 point spread and one lender boasts 200 points lower, beware!
Don’t allow a bank to force you into signing anything immediately. If a broker does not take his time to explain, and allow you time to think about it, cross him off the list. One sure path to headaches is to not understand the loan proposal in the first place. Do not deal with a broker who is not willing to answer any and all questions.
After you have reached agreement on all the terms, get a written confirmation. Be sure all of the terms are in this agreement; a broker should not tell you “we’ll work that out later”. In the case of an adjusted rate home loan, the index the ARM is based on should also be in the agreement. This is also the case in any lock in periods agreed upon. Then, make sure the written agreement is on proper letterhead and signed by the appropriate party. Most problems in home mortgage closings are the result of issues that are not confirmed in writing in advance.
When you receive the written agreement, make sure once again you understand it. Many times, what you have agreed to has been translated to in incomprehensible legalese. Have it changed to clear language so you understand what the terms are. This is another area in which, if a broker does not want to cooperate, you should avoid him.
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