Looking for the Best Mortgage
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Have the lender or broker write
down all the costs associated with the loan. Then ask if the lender or broker
will waive or reduce one or more of its fees or agree to a lower rate or fewer
points. You'llraising another or to lower the rate while raising points.
There's no harm in asking lenders or brokers if they can give better terms than
the original ones they quoted or than those you have found elsewhere.
Once you are satisfied with the
terms you have negotiated, you may want to obtain a written lock-in from the
lender or broker. The lock-in should include the rate that you have agreed upon,
the period the lock-in lasts, and the number of points to be paid. A fee may be
charged for locking in the loan rate. This fee may be refundable at closing.
Lock-ins can protect you from rate increases while your loan is being processed;
if rates fall, however, you could end up with a less favorable rate. Should that
happen, try to negotiate a compromise with the lender or broker.
Remember: Shop, Compare,
Negotiate
When buying a home, remember to
shop around, to compare costs and terms, and to negotiate for the best deal.
Your local newspaper and the Internet are good places to start shopping for a
loan. You can usually find information both on interest rates and on points for
several lenders. Since rates and points can change daily, you'll want to check
your newspaper often when shopping for a home loan. But the newspaper does not
list the fees, so be sure to ask the lenders about them.
Fair Lending Is Required by Law
The Equal Credit Opportunity
Act prohibits lenders from discriminating against credit applicants in any
aspect of a credit transaction on the basis of race, color, religion, national
origin, sex, marital status, age, whether all or part of the applicant's income
comes from a public assistance program, or whether the applicant has in good
faith exercised a right under the Consumer Credit Protection Act.
The Fair Housing Act prohibits
discrimination in residential real estate transactions on the basis of race,
color, religion, sex, handicap, familial status, or national origin.
Under these laws, a consumer
cannot be refused a loan based on these characteristics nor be charged
more for a loan or offered less favorable terms based on such
characteristics.
Credit Problems? Still Shop,
Compare, and Negotiate
Don't assume that minor credit
problems or difficulties stemming from unique circumstances, such as illness or
temporary loss of income, will limit your loan choices to only high-cost
lenders.
If your credit report contains
negative information that is accurate, but there are good reasons for trusting
you to repay a loan, be sure to explain your situation to the lender or broker.
If your credit problems cannot be explained, you will probably have to pay more
than borrowers who have good credit histories. But don't assume that the only
way to get credit is to pay a high price. Ask how your past credit history
affects the price of your loan and what you would need to do to get a better
price. Take the time to shop around and negotiate the best deal that you can.
Whether you have credit problems
or not, it's a good idea to review your credit report for accu
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