Mortgage Hunter Tips: What You Must Knows If You Are Considering A Mortgage Loan

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If you are considering purchasing a home or refinancing—you can go to quickenloans.com or lendingtree.com along with local mortgage lenders in your area—to determine what loan will best suit you—and your family.  You can compare closing costs, APR's and Par rates to determine what loan will best serve your—and your family's long-term interests.

Mortgage Hunter Tips

Just as you are persistent about small purchases, when you are shopping for a mortgage, you need to be just as persistent about getting the right information to protect your financial health.

Here are several "must knows" that you must be aware of:

Interest Rate & APR

The interest rate is the amount that the lender will charge you for the use of money. Interest Rates are normally expressed as a percentage.

The Annual Percentage Rate, or APR, combines the cost of interest with other expenses such as points, origination fees, and closing costs, calculated as a yearly percentage over the life of the loan.

Payment Streams

Will you make fixed payments over 30 years? Or will your rate be adjusted after a few years? Are interest-only payments allowed at first, followed by a balloon payment to repay the principal?

Be sure you understand what's going to happen down the road.

Yield Spread Premium

Will you pay an "excessive" Yield Spread Premium (YSP) that will benefit the lender more than it will benefit you?

Mortgage Brokers are required by law to disclose the YSP, however it is not uncommon for them to omit or not disclose it prominently.

Most Mortgage Bankers are not required to disclose their YSP. When you obtain a loan with mortgage bankers you will normally pay a loan origination fee of around 1%, but it could be higher for loans under one hundred thousand dollars.

How Much Will It Cost?

Your mortgage lender or mortgage broker can estimate your monthly payment, and tell you if property taxes and homeowners insurance escrow payments will be added to it.

Within three days of applying for a mortgage, you should also receive a Good Faith Estimate of fees due at closing, which spells out what it will cost to obtain the loan.

You can then compare the total cost of the loan using the parameters above as a guidepost to determine the best loan for you and your family.

Also be sure to compare par rate with par rate.  The par rate is the interest rate that is stated without you paying any discount points (buying the interest rate down).

If you plan on buying the rate down be sure to compare the same loan discount points—with the same loan discount points—in the same manner that you would do for par rates.

About This Article:

 

The above article was written by Thomas (TJ) Underwood.   Thomas (TJ) Underwood is an active real estate broker in the state of Georgia and is the writer behind The Wealth Increaser, Home Buyer 411,  Home Seller 411, The 3 Step Structured Approach to Managing Your Finances, Managing & Improving Your Credit & Finances for this MILLENNIUM and CREDIT & FINANCE IMPROVEMENT MADE EASY—FREE GUIDE. 

He is the creator of TheWealthIncreaser.com where he regularly blogs about helping consumers improve their credit, finance and real estate pursuits in an intelligent, consistent and proactive manner.  He’s always looking for ways to make intelligent finance improvement happen for those who “sincerely desire” success in their future. 

You can contact him from a number of sources but the most direct way is to contact him through the contact us block that can be found at the bottom of this page. 

You can also get other highly relevant tips on "living your life more abundantly" and possibly earn revenue at the same time by linking to TheWealthIncreaser.com.

Shop on eBay----Shop on amazon.com----Purchase My New Book

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