Many concerns may be swirling around in your head as you look at mortgage rates and prepare to purchase a house or obtain a home equity loan. It is wise to follow some basic guidelines to evaluate your prospective lender. A mortgage company or credit union should be thoroughly questioned and investigated before you sign papers to purchase a home using their loan. In order to do this you need to first assess what your needs are and follow these five tips to find out whether the company is on the up and up and if you desire to work with them.
Firstly, compare the different loan packages that each lender is offering and see if one company won’t come down on the overall terms to make it a better deal. Negotiations should be done with both companies at once in order to set up a “bidding war” in which they try to outdo the other company and thus give you the best deal possible to secure your business. Hang in there to find the best fees, and closing costs available. Secondly, be sure to find out if there is any prepayment penalty. Some lenders will charge a fee if you decide to sell the house after a short time. In this case you want to find out how much of a fee they will charge. Many lenders charge six months interest in the case of a sale within the first few years after a home purchase, some will also charge this fee for a refinance within a certain period or if you win the lottery and want to pay the cash to pay off your home loan, you may wind up paying this fee. It is always safest to thoroughly investigate what you are signing up for, before you make a decision or sign anything.
Thirdly, do your research. It doesn’t hurt to ask for references. Pay attention to Better Business Bureau ratings as well as any positive or negative reviews you find online and take these reports very seriously. If you find several homeowners saying the same disparaging warnings then you’d do well to avoid using this lender. Fourthly, federal law insures than you will be treated fairly when you purchase a home. Lenders should not ask about your health issues, disability status, orientation or national origin. Whether in Edison, NJ or anywhere in the US, it is illegal for a mortgage lender to discriminate for instance against a minority or a woman and charge a higher rate of interest to them, while charging a caucasian man a lower interest rate. Discriminatory practices should be a red flag to steer clear and should be immediately reported.
Fifthly, find out what loan preparation fees, points, hidden fees or anything that is unclear on the contract means before you sign papers. It is in your best interests to seek legal advise to decipher the often difficult to understand terms enumerated on most purchase contracts and when signing mortgage papers it is necessary to understanding exactly what you are agreeing to. A good attorney will be able to tell you suss out what that fine print and legalese actually means and how it will impact your financial health long-term. Taking on a mortgage can be a stressful process but by carefully evaluating your mortgage company you can proceed confidently, knowing you are getting the best deal possible.