Criteria for Choosing a Mortgage Broker

A mort Many times when a buyer is in the market for a condo mortgage, they visit only one broker and immediately take their first loan program offer. In fact, most people don’t realize they have the luxury of shopping for the prefect mortgage program. However, it’s extremely important to not only shop for a great mortgage program but also for the perfect mortgage broker. When researching mortgages, use these basic tips to help you choose a quality broker.

1. Quality mortgage brokers won’t charge up-front fees. The only expense you should have to pay before the closing on the condo is the cost of the appraisal. Some lenders are beginning to charge application fees, but there are enough lenders still out there not doing this that you can certainly find one of them to work with instead of choosing to pay the app fee or any other fees.

2. Great lenders will take the time to explain the different mortgage terms to you that most people find quite confusion and almost always unfamiliar.

3. You’ll want to find a mortgage lender that is easy to contact. If a lender takes a week to call you back or return your email, chances are you’ll never be a priority to them and should likely find someone else to work with.

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Using Ads to Shop for Home Financing

Federal Trade Commission

Fast facts

If an ad includes any interest rate, such as the simple interest rate or rates that apply for a limited period of time, the law requires that the annual percentage rate (APR) also be advertised.

The APR includes all the costs of credit; other rates do not.

If an ad does not include the APR, it does not tell you all you need to know about the cost of credit.

Phrases such as "effective rate," "adjustable rate," or "flexible payments" indicate that the credit terms may change. If you see any of these phrases in an ad, find out more about the credit terms.

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How to Compare Loans Among Different Lenders

Comparing loans of different lenders is often the most difficult part of mortgage shopping. Firstly, it is important to keep in mind that mortgage packages consist of more than interest rates. They consist of a quoted rate, points and closing costs.

Points are an up-front fee paid to the lender at closing. Each point equals one percent of the loan amount. Points are charged, or paid, to lower or increase the rate on the loan. Most lenders will allow you to choose amongst a variety of rate and point combinations for the same loan product. Therefore, when comparing rates of different lenders, make sure you compare also the associated points.

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