Mortgage Shopping Advertising tells us that the interest rate is the most important factor when shopping for mortgages. This is just not true. You should start by searching for an experienced local loan officer. Make sure they offer a large variety of products and are knowledgeable about the products that they offer. If they don’t seem confident describing the pros and cons of each product offered based on your financial situation, then it is probably time to talk to another loan officer. Here are the most important things to consider once you have found the best loan for you, in order of importance:
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1 ) D OW N PAY M E N T The amount of your down payment combined with the loan program will affect your rate. Contrary to popular belief, a higher down payment does not mean you will get a lower rate. Depending on the loan program, you may find lower rates with a lower down payment than someone with 5 to 20% down. So make sure you talk with your trusted loan officer to go over what make the most sense for you. 2 ) T E R M ( L E N G T H O F LOA N ) Reducing the term of the loan by a minimum of five years can effectively save you tens of, if not hundreds of, thousands of dollars in interest over the life of the loan. Reducing the term may also drop your interest rate.
THE SMART HOME BUYER
