Home Loan Quote Tips

rationale · Joined: 08 Jan 2008 Posts: 12

The real estate industry is big business. So big, in fact, that it’s a near certainty that you or someone you know is involved in real estate—either as a real estate agent or a mortgage consultant. But while having someone you know and trust in the industry makes it easy to get help with your home loan, that doesn’t mean that your contact will be able to make you the best offer. Therefore obtaining multiple mortgage rates is always the best course of action.

Here are three key components to think about when comparing home loan quotes:

#1: What is the term for the home loan?

The most common home loan terms are 15-year and 30-year mortgages. Home loan quotes for 15-year mortgage tend to have lower interest rates than 30-year loans but, because they have a shorter payback period, 15-year home loan payments are also usually higher. The lesson learned: Make sure that the quotes you’re comparing are for the same home loan term.

#2: What are the fees associated with a given quote?

Most potential homebuyers focus solely on the mortgage interest rate when they request a home loan quote. Don’t make that mistake. When requesting a quote, pay attention to the mortgage interest rate as well as the loan origination and closing fees that you would incur if you chose that loan. Why? Well, it’s likely that across multiple quotes, you’ll have some similar interest rates. Therefore, fees may need to be your basis for comparison.

#3: What are the conditions of the loan?

It’s important to know the conditions associated with each loan you’re offered because there are a variety of stipulations that can be placed on a loan. Ask about pre-payment penalties and find out when the home loan quote expires / how much time you have to lock in an interest rate. It’s also a good idea to make sure you know at what point and how you can renege on a home loan if you decide to move forward with a loan and subsequently change your mind.

Bottom line: Don’t make a rash decision when seeking a home loan. Find a mortgage lender you trust. Ask questions. Take the time to compare. If you ask the above with every mortgage consultant when requesting a home loan quote, you’ll have be able to clearly see which home loan opportunities are the most advantageous for you.