Tips For Locking in the Best Home Mortgage Rate
By Mick Taylor

Tip #1: Always Shop For Home Mortgage Rates

Don’t blindly accept a Realtor or Builder referral to apply for a Home Mortgage through their preferred lender. Many times they will say, “We work closely with this guy and he gets the job done”. Translation: “We play golf together and he buys the beer”. Remember, the Realtor won’t be paying the bill each month for the next 30 years, you will.

Mortgage Loan Officers that work off of a referral network of Realtors and Builders don’t have to have competitive Home Mortgage Rates because they have a steady stream of “Drones” (people who are referred to them and don’t shop) calling them. Shop around, get the lowest cost Home Mortgage Rate, then if you are inclined, approach the “preferred” Loan Officer you were referred to and ask him to match the quote.

If you apply for a Home Mortgage through a preferred lender without shopping, you will pay hundreds or even thousands of dollars in additional costs.

Tip #2: Call For Home Mortgage Quotes After 11:00 a.m. Eastern Time

Mortgage Rates change each day and sometimes midday. The previous day’s rates typically expire by 8:30 a.m. the next morning. Generally, Home Mortgage Rates are published each day by 11:00 a.m. Eastern time. This varies from lender to lender. To make sure you are getting Home Mortgage Rates from the current day and not a mixture of rates from the previous day from some lenders and the current rates from other lenders, always do your rate shopping after 11:00 a.m. Eastern time.

Get all your quotes after 11:00 a.m. Eastern time.

Sometimes Home Mortgage Rates change midday due to a volatile bond market. When this happens, some Home Mortgage Lenders will adjust the Discount Points for their rates in accordance with the new bond prices and publish new Home Mortgage Rates for that day. Other Lenders may continue to honor their morning rates.

Tip#3: Always Tell The Mortgage Loan Officer You Are Prepared To Apply For A Loan NOW

If you are buying a home, tell the Home Mortgage Loan Officer you are Rate shopping and you have a “ratified contract” to purchase a house. Tell him you intend to make a decision and Lock-In a rate on that day, but you have to check a few other lenders. If he asks you how his rates compare to the others, tell him he’s the first person you’ve called. If you are refinancing, tell the Home Mortgage Loan Officer you are ready to apply for a Refinance Home Mortgage today. If you don’t tell him that, he may provide a fake Home Mortgage Rate quote.

Loan Officers know you will probably talk to another lender with lower Home Mortgage Rates and the only way he can be sure for you to call him back is to give you a fake quote that appears to be the lowest. He’s expecting you will rate shop for several days and figures you will call him back in a day or two because he provided a low, bogus rate quote. Also, since Home Mortgage Rates change daily and are subject to change at any time, he’s not concerned about giving you a fake quote.

How will you compare quotes if you don’t know which quotes are real and which are part of a bait and switch plan? The only way to ensure getting real quotes is to box in the Home Mortgage Loan Officers by making them think you are ready to Lock-In a Home Mortgage Rate immediately.

Tip#4: Ask For The Total Points And The Total Fees

When you call a Mortgage Lender, ask for the “Total Points” (Discount Points, Loan Origination Fee, Broker Points) for each Home Mortgage Rate. Some lenders will only quote the Discount Points and deliberately leave out the Loan Origination Fee. You won’t find out about the 1.00 Point Loan Origination Fee until you apply for the Home Mortgage. By that time, the Loan Officer figures you will just accept it because he’s got your application and pulled your credit report. In addition, Mortgage Brokers often neglect to mention their Broker Fee.

Some lenders do not charge a Loan Origination Fee.

When you are quoted the Total Points, specifically ask them if there is an additional Loan Origination Fee or Broker Fee being charged. You truly have to nail this down when you talk to a Home Mortgage Loan Officer.

Also, ask for a list of ALL other fees that will appear on the Good Faith Estimate that you will be paying to the Lender or Broker. Make sure they include their Credit Report and Appraisal Fees. Some lenders charge one lump sum fee and that includes the Credit Report and Appraisal Fees while other lenders will itemize each fee. Keep it simple and ask for all fees, including the cost of the credit report and appraisal fees.

Don’t get confused by Title Company, Attorney Fees or Escrows. A lender will estimate these on your Good Faith Estimate, but these charges are not related to costs associated with a Mortgage Rate quote. The amount required for your escrow account will not change from lender to lender and Title Company and Attorney Fees are not being charged by the lender. Don’t include them in your comparison.

Tip#5: Always Confirm The Rate Lock Period When Asking For A Rate Quote

If you are buying a home and you need 60 days to close, make sure you specifically request Mortgage Rate quotes with a 60 Day Lock period. Some Home Mortgage Loan Officers will quote rates with 15 Day or 30 Day Lock periods because the Discount Points for shorter lock periods are less than rate locks for longer periods. Quoting a Home Mortgage Rate with a 15 Day lock period obviously gives that Loan Officer an unfair edge. It is also a waste of your time because the quote isn’t real if you can’t settle on your loan within 15 days. Always specify a 60 Day Lock-In if you are buying a home. Ask for 45 Days if you are refinancing, but you may be able to get it done within 30 days if you are very diligent and call your Home Mortgage Loan Officer twice a week for a status of your application.

If your rate lock expires, the lender will re-lock you at the higher of either the original rate or the current rate when you decide to re-lock. That’s a LOSE/LOSE situation for you. Never let your rate lock expire.

Tip#6: Compute The Dollar Cost Of The Points And Add All Fees

After you’ve spent some time talking to a bunch of Mortgage Loan Officers, you will have lots of Rates, Points and Fees on a sheet of paper. You will need to compute the dollar cost of the Points (multiply the mortgage amount X the Total Points expressed as a percent; For example, multiply 400,000 mortgage amount X.625% for.625 Points). Then add the dollar cost of the points to the Total Fees. You can then compare each Home Mortgage Lender’s Total Cost (dollar cost of the points + all lender related fees) for a given rate. That will show you which Home Mortgage Lender has the lowest cost Home Mortgage Rates.

If Mortgage Insurance (not to be confused with mortgage life insurance) is required on a Conventional Home Mortgage, ask for the cost per year expressed as a percent and compare it from lender to lender. Some lenders require different levels of coverage and this will affect your monthly Mortgage Insurance payment. In addition, lenders use several different mortgage insurance companies and they charge different rates for their coverage. The lender will select the mortgage insurance company.

The cost of Mortgage Insurance can vary from lender to lender even though most Home Mortgage Loan Officers will say, “We don’t determine the Mortgage Insurance coverage, Fannie Mae and Freddie Mac do”. Your can just say, “Please humor me and provide the Monthly Mortgage Insurance expressed as a percent”.

You will want to check the quoted percent with what is on your initial application documents and final loan documents to make sure the Monthly Mortgage Insurance payment isn’t higher than what you were quoted. If it is, get it reduced immediately. If they won’t do that, then ask them to reduce your Home Mortgage Rate by.125% and that should cover the difference.

If you are getting a government insured mortgage (FHA or VA), you don’t have to get into a comparison of the FHA MIP or the VA Funding Fee. This is a cost you will be paying, however every lender MUST use the same costs, so there is no reason to attempt to compare these costs from lender to lender.

Tip#7: When You’ve Found The Lowest Cost Rate, Apply and Lock The Rate

While you were looking for houses or thinking about refinancing, you may have shopped around and gotten some quotes from lenders and narrowed down your search to the best 5 Home Mortgage Lenders or Brokers. But when it is time to apply for your Mortgage, make sure you update your quotes for the 5 lowest priced Home Mortgage Lenders. After you identify the Home Mortgage Lender with the lowest cost rate, call and apply for the loan. Tell the Home Mortgage Loan Officer you want to Lock-In your Home Mortgage Rate and apply NOW. If the quote has changed since you updated your quotes a couple of hours before, tell the Loan Officer you want him to honor the previous quote. If he won’t do it, tell him you may call back. Then call the next cheapest Home Mortgage Lender on your list. If that lender tells you the same thing, you can go back to the first lender and proceed with the application process.

Before you provide your application information, make sure the Home Mortgage Loan Officer agrees to provide you with an actual Rate Lock confirmation via email or fax on the same day you apply for your loan. When you receive the Rate Lock confirmation, check it and make sure you are Locked-In for the number of required days (30, 45 or 60), with the correct Loan Type (30 Year Fixed, 15 Year Fixed, etc.), with the correct Total Points quoted. It’s normal for a lender to require you to apply over the phone before they will Lock-In your Home Mortgage Rate.

TIP#8: Never Float The Rate

If the Mortgage Loan Officer thinks you might be inclined to FLOAT your Rate and Points, he may say, “I think the rates are going to be coming down, so you might want to FLOAT”. Remember this, never FLOAT your Home Mortgage Rate. Never. Always Lock-In the Rate and Points. If you FLOAT, and the Discount Points for Home Mortgage Rates drop, you will only realize the benefit of a small part of that drop in the Points, if any at all. The Home Mortgage Loan Officer will keep the rest of the savings as a fat commission.

Here’s how they increase their commission when you FLOAT. Originally, the lender quoted 4.875% with 1.00 Total Point when you applied for your loan. Then 45 days later you called to Lock-In. Keep in mind that over the 45 day period that you were FLOATING, the actual Points for 4.875% dropped to.250 Total Points. So you should have saved.75 Total Points on your 4.875% rate. Right? No! First, you don’t know if his company’s points have dropped or by how much they might have dropped. So, instead of giving you 4.875% for.250 Total Points, the Home Mortgage Loan Officer tells you his rates only dropped a little bit. He says you can Lock-In 4.875% for.75 Total Points. You are happy because it is.25 lower than what it was when you applied for your loan, but the Home Mortgage Loan Officer is ecstatic because he keeps half of the “overage” you paid. That overage is.50 points and he splits this with his company. If the mortgage amount was $400,000, he just earned.25% which is an additional $1,000 commission. That’s not bad for a five minute phone conversation.

If you FLOAT and the Discount Points for Mortgage Rates increase, you will pay for the increase. FLOATING is a LOSE/LOSE proposition for you and a WIN/WIN for the Home Mortgage Loan Officer.

Some companies quote very low rates and attract lots of applications, but they don’t let you Lock-In until 15 Days prior to loan closing. If you apply for a Mortgage through a company with that policy, you will get screwed. When it’s time to Lock-In your Mortgage Rate, you will pay an “overage” that will go straight to the Mortgage Loan Officers pocket. You will either pay more points for the rate you requested at the time of application or you will get a higher rate. Either way, you will get screwed and the Loan Officer will get a fat overage added to his commission.

Tip#9: Get a Final Good Faith Estimate Several Days Before Loan Closing

Get a copy of the Final Good Faith Estimate at least a few days before the scheduled closing day. Check the Mortgage Rate, Points, Fees and Monthly Mortgage Insurance Premium (if applicable). Make sure you are getting exactly what you bargained for. Ask questions if you don’t understand something. Demand that previously undisclosed fees be removed from the Final Good Faith Estimate. Make sure you get a revised estimate if the Mortgage Loan Officer verbally agrees to make changes.

The day of loan closing is the wrong time to haggle over discrepancies.

http://homefunding.com

Technorati Tags: Mortgage, Home Mortgage

One of the single largest financial purchases a person makes in a lifetime is a home. And more often than not, a home mortgage is required to fund the purchase. But how many people have been told, that the current way a mortgage is paid off, is like a cancer on our financial health? The mortgage and banking industry has offered to the unsuspecting public the 30-year fixed amortized mortgage the most expensive mortgage, a financial cancer akin to the cigarette industry offering cigarettes.

US consumers have had no other choices, but to use a mortgage, that only benefits banks and mortgage companies. Now a revolutionary mortgage program is available that will show them how to pay off their home mortgage in as little as 7 years.

Enter Money Principal Group, a company located in Utah, founded by Ariel Metekingi, anative of New Zealand. Their premier innovative mortgage product, The Mortgage Eliminator, is based on a 30 year+ proven Australian industry standard and model in use by over a third of homeowners in that country. It was later introduced to the New Zealand market, where homeowners there achieve similar results; paying off their debts and mortgage on average of 6-10 years.

This powerful new tool to combat the current financial plague of debt combines amortgage and a full-service bank account. The new “all-inclusive” type loan creates huge savings in interest payments and loan payoffs in one-half to one-third the time requiring little to no change to current spending habits or income.

How does it work? Homeowners deposit income and other assets into the newmortgage account and since it allows access like a checking account, expenses are paid out from it by check or ATM card. The fundamental part is, that when the homeowners’ money isn’t being used it sits in the mortgage account, reducing the daily loan balance on which interest is computed. This saves on average hundreds of thousands in interest over the life a typical loan and reducing interest means more money for principal; so the homeowner builds equity faster and owns their home sooner.

“What this does for homeowners, is it empowers them to take control of their financial health,” says Ariel Metekingi, founder and president of Money Principal Group. “With this new loan program, a homeowner can combat the financial cancer known as consumer debt plus current mortgage options and it allows the homeowner to reach their goals sooner in life, rather than later. This isn’t a mystical trick of numbers; it is simply taking away the interest spread banks earn and is given back to the homeowner.”

There are three steps that the consumer can take, in order to reduce their mortgage payout and enjoy a home paid off in as little as 7 years.

1. Decide what your goals are

One of the first steps with The Mortgage Eliminator program is to have a clearer picture of where you are heading financially-speaking, and decide on what kind of goals you’d like to reach. First take a look at where you were five years ago. What kind of expectations did you have than? Did you plan on certain things to happen by now? If they didn’t happen, do you have the willingness to make changes to reach those goals?

Goal setting is important, because it allows you to create a flexible plan and schedule to put into place and stick to. Imagine where you’d like to be in 5 years. What would you like to accomplish?

Let’s say some of your goals are to have an emergency fund of at least one year of your current income and you’d like to reach that amount in, say, 2 years. And another goal, (if you have a child or children) is to set aside a college fund. And lastly, you’ve been dreaming of that sports car you’ve always wanted since you were a teenager.

Now that you have some goals in mind, what would it take to reach those goals? And keep in mind that your household income will probably remain constant.

Are there current investment options or debt elimination options, which can help you reach those goals?

Using your flexible mortgage account through The Mortgage Eliminator can greatly increase your ability to save interest and money and free up resources to help you reach those goals. And it doesn’t have to drastically change your spending habits or current household income. Just determine your budget and where the money you make is spent in your life.

2. Set up a budget

The next step in paying off your mortgage quickly is to look at your current spending habits and create a budget. How difficult is this? That depends on your level of commitment and your ability to discipline yourself into reviewing your budget.

One way that helps homeowners is through the included budgeting software and personal coaching and review available with The Mortgage Eliminator, from Money Principal Group. Studies show and human nature reflects this, is that if we have tools AND a personal Coach to help create and maintain a budget, we’re far more likely to succeed. Money Principal Group states that over 90% of its’ clients achieve success with The Mortgage Eliminator system.

Think of having a coach for your personal financial education, just like a great tennis star has a coach or golf professional has a coach. How many of us rely on a coach to become financially wealthy?

With The Mortgage Eliminator, you’re given that important part, a coach to review, create and stick to a budget that creates positive cash flow, which will take you to the next steps of paying off your mortgage in less time, without any change to your current income or spending habits.

3. Get a financial review and analysis

Everyone’s financial situation is different and completely unique. Imagine your situation as the human body and financial debt (including a mortgage) as a cancer. Before a surgeon would operate on a patient, a complete review of the symptoms and where tostart cutting, is done, BEFORE the surgeon performs one cut.

Think of a financial review and analysis as the same thing as “surgical review” on your situation. What kind of mortgage are you in now? Are you a first-time homebuyer? Are you in an ARM loan and now may need to switch to a fixed rate loan?

What is your financial “picture” and your current budget? Your income, expenses, current debt and your short-term and long-term goals factor greatly into the financial review and analysis.

In order to determine just how quickly you can pay off your current debts and mortgage (or how fast you can pay off your first home, if you’re a first-timer), a financial “snapshot” or review must be completed. Taking a look at your entire picture of income, debts, and how it relates to your goals, is the crucial step, in determining how best you should start your plan.

What is the strategically best way for you to reach your goals? With a financial review and analysis from Money Principal Group, a plan is created to show you the best options that HELPS YOU in reaching those goals quickly. Only a loan that SAVES YOU MONEY is offered and if it doesn’t make strategic, financially sound sense for you, it’s not offered and a different course of action is suggested.

Is this new loan product and system for everyone? Yes, if you can achieve the simple disciplines of budgeting and currently have positivecash flow or are willing to review your budget to recover funds to create significant positive cash flow. You must be coachable and allow the your goals to dictate your planof action. If you’re willing to do that, the payoff is unlimited and getting rid of debt and your home mortgage in 6-10 years is no longer a dream, it’s a reality.

“The ability to be mortgage free within 6-10 years, quickly eliminate consumer debt and free up existing income to start a significant investment program for the future is a now a reality. This can all be possible without requiring any additional income or reducingstandard of living. The Mortgage Eliminator has empowered the individual in New Zealand and Australia to impact positively on their own financial destiny in ways, which traditionally, many could not otherwise achieve.” says Metekengki. “It is now available for the US, to achieve the same level of financial success and freedom, already experienced and proven in these international markets.”

For more information on how you can be debt-free and pay off your home mortgage in as little as 7 years, and experience the savings with the Money Principal Program using their proprietary calculator, visit www.PDXLoan.com or call 1-800-862-0784 ext 21.

About the author:

Ed Bisquera, an event planner, music producer and an author, has worked with record executives and Fortune 500 companies like Sony Records and Microsoft. He resides near Portland, Oregon and owns blogs http://blog.PDXWebMedia.com, http://blog.PDXLoan.com and manages http://www.PDXLoan.com. Articles, interviews and consulting available at 1-800-862-0784 ext 0.

Technorati Tags: mortage, home mortgage, home mortgage resources, home-mortgage-resources.com, John Hocking

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