Comparing mortgage loans is one of the smartest things you can do. Buying a home is a major expense, and getting the best deal on your home loan could save you a lot of money. In this article, LendingTree will walk you through the process of comparing loans, and help you understand how to get the best deal when you go to buy your home.
Don’t be afraid to ask your lender or broker to waive or reduce fees, or agree to a lower interest rate or fewer points. Make sure the lender or broker isn’t agreeing to lower one fee while raising another, or lowers your rate by increasing your points. You have nothing to lose by asking lenders or brokers if they will provide you with better terms than the original terms they quoted, or to compete with terms you found through other lenders or brokers.
To give you an idea of what you can negotiate, items on the Good Faith Estimate (GFE) you may negotiate include:
You should get a new GFE any time there’s a “material” change to your loan application – if you switch programs, for example, or when you lock in your mortgage rate.
Charges that cannot be negotiated include:
If you suffer from bad credit, there’s really two choices: Wait to buy a house and try to improve your credit score, or pay more for your mortgage. Your credit history and credit score are indicators to lenders and brokers of your worthiness to obtain credit. It’s an indication to people who loan you money on whether or not you’re likely to pay it back. Therefore, if you have poor credit, loaning you money for a mortgage is a riskier proposal than if you had good credit. In order to account for this risk, you may expect to pay a higher interest rate on the money you borrow.