Choosing a Mortgage Company
You will potentially be dealing with your mortgage company for the next thirty years, therefore; it is important to choose your mortgage company wisely. The best way to choose a mortgage company is to ask those around you for their experiences. Talk to friends or relatives who have recently purchased a home and ask if they were happy with the service from their mortgage company. By doing this you can begin to build a list of companies that you want to approach.
Real estate agents can also be a good source for mortgage company recommendations. Because they see people working through the financing process daily, they develop a feel for which companies are easy to deal with, and which are not as easy. Although word of mouth is an excellent way to develop a list of potential mortgage companies, it should not be your only method used. Everyone has a different financial situation, and what works for one person may not be the best choice for someone else.
Using the list of mortgage brokers that you have compiled, you can make appointments to go in and personally speak with each one. This will give you a feel for the personality and demeanor of each company. Also, if you have trouble getting your calls returned, or setting up appointments as a prospective customer, it is unlikely that your situation would improve if you had your mortgage through the company.
What to Expect from the Mortgage Company
A mortgage company is a service industry. It is important to remember this. Many people find the mortgage approval and home buying process so intimidating that they forget that they should shop for a mortgage company that they are happy with. A mortgage company should be happy to quote you specific interest rates, and let you know when you should lock in these rates. They should also tell you what the specific costs are in acquiring a loan. This means a good faith estimate on closing costs, discount and origination fees that must be paid and any other costs that may be involved when purchasing a home.
The mortgage company should be upfront about all of the technical details of the loan. They should let you know if there is any penalty for pre-payment, the amount of money required for a down payment, and what documents you will need to provide for loan approval. The mortgage company should also let you know what guidelines you must meet to qualify for a loan with them. This will include credit history, your income, employment history, your assets and liabilities and any other specifications they require.
Many states offer specialized home buying programs. The well established home mortgage company should be familiar with the various programs in your state, and provide you with information about these. If you believe that you may qualify for one of these programs, the mortgage company should help you complete any necessary paperwork and determine if you qualify.
The mortgage company should be willing to tell you how long it will take to process the loan, and if they guarantee it will be processed by a certain date. They should also provide you with any information that may slow down the loan processing process, and their method for dealing with problems.
After the Loan Closes
Once you close on your mortgage, you may never see or think of your mortgage company again. You make your monthly payment, and sometime, years down the road, you receive the title to your home. While this happens occasionally, it is not as common as you may think. You may move, and decide to sell your home. Interest rates may drop, making the decision to refinance attractive, or, you may have trouble making your monthly payment due to job loss or medical problems.
Before selling your home, you must know how much you owe on it. Your mortgage broker should be able to determine the balance of the loan and provide you with this information easily. If you decide to refinance, consider staying with the same mortgage company. Often, the mortgage company will negotiate lower closing fees or no closing costs if you refinance through the same company that currently holds your mortgage.
Finally, if catastrophe strikes and you are unable to make your mortgage payment, it is imperative that you get your mortgage company involved early in the process. They can provide you with resources for help in making or delaying payments, and let you know if foreclosure is imminent. As tempting as it is to bury your head in the sand at this time, remaining proactive can help you hand on to your home, or allow you to sell your home before foreclosure proceeding begin.
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