How Do I Get a Good Deal on a Home Mortgage?

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Applying for a home loan can be scary enough but what about those “predatory lenders” out there that want to make a fast buck?  How do I know that I am getting a fair rate?  How do I get in on all these buyer incentive programs on Boise homes for sale

Here are some tips that could you find the right mortgage for your new Boise home and not get ripped off in the process: 

Shop around for a mortgage loan. 

Ask friends, relatives, your realtor or trusted advisors for referrals on mortgage lenders.  If some one you trust has had a positive experience then that is a good place to start.  Always be weary of high-pressure sales tactics of any lender.  If they are pressuring you to act immediately, it could be a red flag of predatory lending. 

The best way to make sure you are not being overcharged is to get different price quotes for ALL the costs of the loan.  Do not just compare interest rates on the note.  The government requires lenders to disclose the APR, which takes into account the costs of getting the loan such as points, loan fees, and mortgage insurance.  Just because one lender has a lower interest rate does not mean it is less expensive if you have to pay 3 points (3% of the loan amount) to get that rate.  The best way to compare rates is to ask for the APR.  This will ensure you are comparing apples to apples.                                                           

house_acreage6_500Do not be afraid to ask questions and get explanations so you have a complete understanding of all the costs of the loan.

If you have never applied for a real estate mortgage, you may think they are speaking a different language and not know what all the terms mean.  If the lender will not answer you questions and explain the process, then maybe you should ask why not and shop for a different lender. 

Be sure you know the total borrowing cost over the life of the loan.  Is there a prepayment penalty?  Is the interest rate fixed for 30 years or will it adjust after 5 or 10 years?  What is a balloon payment? 

Additionally, it is important to ask your lender about the different types of loan programs available.  There are many first time buyer incentive programs, community loan grants, or neighborhood stabilization programs on Boise real estate such as Homepath by Fannie Mae that may be great deals for you.  You would not know about these unless the lender explains them to you.  Some lenders will not even bother since they can make more money on a more conventional real estate loan program.  In this case, it is even more important that you ask and the lender is honest enough to provide ALL the options to you and not just the easy or more profitable ones for them. 

By just taking your time and shopping for a lender well before you start shopping for your Boise home you can make a better decision on the right loan program for you.  When you found “your dream home”, there are multiple offers on it, and you are stressed out to the max is not the ideal time to be researching loan programs.  Asking questions, doing your homework, and finding a reputable lender that you trust you will be worth its weight in gold, literally by saving you thousands in the long term.  You can then rest assured that you are not getting ripped off by your lender.

Financing all set? If so, you're ready to check out some Boise real estate and take advantage of the best housing prices we have seen in years. 

Kevin Hughes

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