Whether you are looking to purchase, refinance or obtain a home equity product; knowing your options are essential to obtaining the best deal. A mortgage is a financial product that you will have for several years. The typical home mortgage term starts at 15 years. Therefore, it is important that the company you choose has a reputation of providing exceptional customer service as well as great rates.
The first step in finding the best mortgage is to shop around. Since there are so many mortgage providers, it is best to start with your current bank. If you have been banking with the same financial institution for several years, you have built a relationship with them. They know how well you manage your money, saving habits, how often overdrafts occur, and if you have a credit card with them; they can see how well you manage your credit. This is information that all mortgage underwriters want to know. Therefore, it would make sense to start with a mortgage consultant at your local bank. Then, contact at least two more banks to compare rates, terms, and incentives.
The second step is to compare. Now that you have a minimum of three options, you should take some time to compare the annual percentage rates, terms, additional fees, and incentives offered by each company. Common incentives are gift cards and closing cost credits. The annual percentage rates and terms are the most important items, since they impact your costs to acquire and maintain your mortgage. Be sure to read ALL fine print to ensure you understand the cost and terms associated with each company. If you happen to find out that your mortgage company will sell your mortgage, think carefully about how that could impact you. If your mortgage is sold to a company that doesn’t value customer service, then it could cause problems down the road.
The third and final step is to negotiate. Since you have compared the terms, costs, and incentives of each mortgage company; you should choose the company that will not only offer you the best deal, but will also value your relationship. Financing a home is a big investment, so you want to ensure that the bank will continue to help you build and grow financially, if and when the need arises.
I hope this guide has helped you make a more informed decision. Happy shopping!