A home is the biggest purchase you’ll probably make in your entire lifetime, and if you’re like most people, you’ll need to take out a mortgage loan in order to make the purchase.
You have the right to shop around for the most favorable terms, and you have the right to negotiate with lenders.
But how do you know you’re getting the best possible terms?
How to Shop for a Home Loan
You can get a home loan from any of several types of lenders, including:
- Commercial banks
- Mortgage companies
- Credit unions
You can also obtain a loan through a mortgage broker; a mortgage broker arranges the transaction rather than actually lending money.
It’s always important to comparison shop. You can talk to as many lenders as you need to, and when you do, it’s a good idea to have a list of questions on hand.
Most people ask about:
- You’ll need to know about each lender’s current mortgage interest rates, as well as whether those rates are fixed or adjustable. It’s a good idea to also ask about the loan’s annual percentage rate, or APR.
- If you are paying points, which are fees to the lender or broker that typically lower your interest rate, ask for the points in dollar value so you know exactly how much they will cost.
- Ask lenders about their loan origination or underwriting fees, broker fees, transaction fees and closing costs. It’s a good idea to ask for an explanation of these that you don’t understand.
- Down payments. Some lenders require you to come up with 20 percent of the home’s purchase price to use as your down payment. However, you may be eligible for a lower down payment based on the type of loan you choose. For example, an FHA loan or a VA loan will require a lower down payments than a traditional loan will.
The Laws on Fair Lending
There are laws that hold lenders accountable for fairness, including the Equal Credit Opportunity Act. Under the Equal Credit Opportunity Act, lenders are forbidden from discriminating against credit applicants based on:
- National origin
- Marital status
- The use of public assistance programs
- The exercise of rights under the Consumer Credit Protection Act
Are You Looking for a Home in Tampa Bay?
Whether you’re looking for a home in Hillsborough, Pasco or Pinellas Counties, we can help. Call us at 727-584-8480 or 813-961-6000. You can also contact us online to tell us what you’re looking for; as soon as we hear from you, we’ll start searching for homes that meet your needs.