What to Look for When You're Loan Shopping
Nov 30, 2016
Just like you invest plenty of time searching for the perfect house, you should spend time looking for the best loan to fit your financial needs. Saving even a little bit of money on your rate will add up over the years. Below are some tips to use to help you make the right choice for your loan.
Have Your Credit Report Before You Begin
Your credit score will determine which type of loan is best for you and what your interest rate will be. The better your credit score, the more loan options you will have and the lower your interest rate may be.
Get Multiple Quotes
The most important rule of loan shopping is not to agree to the first quote you get! It is best to talk to multiple loan officers from different companies to see which one gives you the best quote for your situation.
Know Your Options
With the different types of loans out there, it can be extremely confusing to figure out which option is best for your financial needs. That’s why it’s a good idea to do your research before you speak with a professional so you have a general understanding of what they are explaining to you. You may think a fixed rate conventional loan is right for you, when in reality an adjustable rate mortgage may be the better choice.
Compare Loan Estimates
Once you’ve decided on a loan option, the lender will put together a Loan Estimate – an official disclosing form – that is standard across all lenders. On the Loan Estimate, it will show all the fees associated with the origination of your loan, and what your estimated monthly payment will be with taxes and insurance. This is a great way to compare fees and rates!
Interview the Person who will Handle Your Loan
Don’t feel nervous asking your loan officer about their experience and qualifications! Licensed professionals understand that buying a home is a major decision, and they will be happy to share their background. Also, research the loan officer online. With so many review websites available at your fingertips, you can find out other people’s experiences with this individual before you decide to work with them.