How to get through the home financing process easily and with great results
Is there anything worse than the tedious process of getting a mortgage or refinancing? Here are some ways to make it infinitely less painful.
1. Get a sense of rates from a reputable source: the government
All rate charts online are simply ads for mortgage banks disguised as competitive pricing. You can’t actually get a quote until the bank knows what your credit risk is, which is more complicated than just submitting a credit score. Get a sense of rates from the Consumer Financial Protection Agency which compiles rates from actual current data and even breaks it down by loan size and region. Don’t get your information from rate charts on the internet. They are just basically just ads for mortgage companies to get you to click.
2. Get all of your paperwork in order and put it in labeled folders
I like to use Dropbox because then I can access the files I need from anywhere, and even provide a link to a file instead of an attachment, which is handy. It really helps with the home financing process. That way, if you are running to the store and the mortgage broker needs the same thing you sent him three other times, you can get it with minimal pain.
We created a free guide, folder organizer and debt calculator to help you with this part of the process. Get them here. They are designed to help you breeze through the home financing process, and save you time, money and headaches.
3. Shop around
Once you have everything organized in folders, it makes it really easy to shop around, which you want to do if you are going to get the absolute best rate possible. Need to send documents to another mortgage broker to get a comparison quote? No problem! I recommend getting at least three quotes, and ideally four, with two from mortgage brokers and two from credit unions, retail banks or mortgage banks.
4. Get a Loan Estimate
A Loan Estimate is a government regulated document that every mortgage broker or bank can provide that lists all of the fees in a format that is actually readable. My mortgage broker, on the other hand, sent me a blurry fax where I could not even read the categories. It was not even the least bit legible. You need something you can read and compare to other quotes you get. Ask for a “Loan Estimate”. Trust me. It will make your life so much easier. Once you have a Loan Estimate from all of your mortgage broker and banker contenders, it will be easy to pick the lowest rate/fee combination because you will actually have all of the info you need in a way you can see and understand. Very important.
5. Pick your broker or banker and stay on him or her like a jockey in the final leg of the Preakness!
In order to ensure a timely mortgage closing, unfortunately you do need to stay on your mortgage broker like a jockey on a horse, as things will inevitably drag. Remember, there is a lot of paperwork behind the scenes and things do get lost in the cracks between the broker/banker, loan processor, etc. You need to know where your file is and what are the barriers to closing. Did they say something would happen on a date and it did not? Demand an explanation. Don’t take the pressure off until you finally get an official loan commitment.
If you follow these steps, you’ll have a more efficient experience with a better outcome, and a smoother home financing process.
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