First time home buyer in San Jose, CA is usually sensitive to every dollar saved or spent because buying a home is probably is the biggest investment and commitment in his or her life. One of the topic of discussion during our initial consultation is always about how to get the best loan/mortgage interest rate. Most buyers understand that shopping for a low mortgage interest rate is a good idea because it directly impact your buying power. For example, all other things being equal, the monthly payment on a $500,000; 30-year fixed rate mortgage with a 8% interest rate is approximately $3669 while the payment on the same loan at 6% is approximately $2998.
HOWEVER, with so many mortgage products on the market and the barrage of rates lenders throwing out in an effort to get your attention, it may be difficult to know whether the quotes you obtained are dependable. Here are some practical tips that may help you navigate:
1. Level the playing field and provide each lender with the SAME basic information: loan amount, types of loan, loan term, how many points you're welling to pay, how long you want to lock in the rate.
2. Because rates changed daily, it's important to shop all lenders on the same day or at least within few days.
Keep in mind that there are several variables that will determine the mortgage interest for which you will qualify, including your credit score and the size of the down payment. Generally, lenders will be able to provide you with an estimate - known as the Good Faith Estimate - that will itemize your loan costs.
Be on the look out for lenders who undercut the competition by offering or advertising low ball or "teaser" rates that are well below what the market typically offers. These lenders can be found advertising virtually anywhere, online, newspapers, or on the radio. Some lenders may dodge the rate by attaching steep underwriting criteria, like requiring an unusually HIGH credit score.
One quick way to save you the time and money is to enlist the services of a qualified and reputable mortgage professionals that has access to the major lending markets. The key in today's challenging lending environment is to work with experienced mortgage professionals who can anticipate issues before they come up and solve problems to close transactions.
If you need a referral to an experienced and knowledgeable lender, please contact me. I have several trusted and preferred lenders that I consistently work with.