Home Mortgage Loan Tips For Anyone Buying A Home

If you are buying a home, making a larger down payment today not only saves thousands of dollars over the life of your home mortgage loan, it also means you can buy a larger more comfortable home for your family. Where can you get more for your down payment?

Get Full Disclosure Broker Fees and Points

Try to use a home loan broker who will fully disclose their fees and the actual rates and points available to them. If you already have a lender, check line 812 of the good faith estimate to see if you had to pay any broker fees. If you have refinanced recently, you may need to check your original mortgage paperwork.

Next, try to find a home mortgage loan lender that doesn't charge an origination fee. If you already have financing, this will be on the first line of the good faith estimate.

Other charges by the home mortgage loan broker that you can avoid could include document preparation, application, and processing fees.

Interest Rates Will Change - The "Float" Provision

You may choose to float your rate and points if you feel that interest rates will fall before your closing date. This will give you a one-time opportunity to lock-in at a lower interest rate before your closing. Be aware that this is only effective while you are still able to switch lenders. After that point, the lender has no reason to honor the float provision. If you're scheduled closing will not allow you to shop lenders again should you need to back out, you can ask your current lender to quote you the lock-in rate currently being quoted to new borrowers.

You May Be Able To Take Advantage Of A Delayed Lock-in

Your rates will change from the amount quoted to you if for some reason the lock-in is delayed for a period, say over the weekend. If the interest rates go up, your rate goes up. But if interest rates go down, your quoted rate will remain the same. You must watch the rates on the day you will lock-in. You could save $4000 on a $150,000 15-year home mortgage loan if the rates changed from 6.25% to 6.00% over the weekend.

Loans Advertised As No Cost

No cost loans usually have high rates so you wouldn't be shopping for loans from these lenders. If you are looking at a "no cost" loan, be sure to check the APR. The APR and the advertised interest rate need to be almost the same. If there is a large discrepancy, it is because there are fees somewhere.

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