Ten Tips for Saving Money on Your Mortgage
How To Save Thousands Of Dollars On Your Home Mortgage
Randy Johnson's book quickly became the #1 best selling "how to" mortgage book in the country. Syndicated columnist Robert Bruss rated it the best mortgage book of 1998 and a mortgage industry guru called it "the best text ever written on the subject."
It's practical advice from a mortgage expert who writes from personal experience that literally can save you thousands of dollars.
- Lenders are a lot smarter than you about mortgages. To improve your odds, you need to get an education, (like reading my book) to develop the power you need to negotiate a better deal.
- Get your credit report with credit scores and correct any mistakes before applying
- Do not simply call a bunch of lenders and ask, "What are your rates?" Many lenders quote programs which are designed specifically to snooker the telephone rate shoppers. It will "sound good" because it was designed to "sound good." Some loan reps purposely lie to phone shoppers in order to induce borrowers to apply with them. You are not smart enough to catch them.
- Your objective is to find a lender you can trust. You'll find such a person through referrals from your friends, co-workers, and neighbors who are homeowners, not the Yellow Pages. You want to find a Loan Rep who will help you and, if needed, "go to the mat" for you.
- Determine which loan program is best for you. As an example, do not pay for 30 years of expensive rate protection (what the 30 year fixed mortgage rate loan does) if you are only going to be in your home for 6 or 7 years.
- Beware of "Zero Point" or "Zero Cost" loans. They are sucker loans. Nothing is free!
- Your lender is legally obligated to send you the RESPA and Good Faith Estimate of Closing Costs within 3 days of application. Insist on this! Read them and ask questions until you understand them. While this disclosure is not binding on the lender, it will show the costs and fees on the program on the date you applied, a good starting point.
- You need to find out your lender's lock policy. They probably won't lock until you tell them to. The market can change rapidly so developing an executing a good lock-in strategy is very important.
- Make sure that if the market improves while your loan is in process, your lender passes 100% of the benefit of the improvement in rates to you.
- Refinancing -- obtaining a new mortgage to replace an existing one -- can save you big money, but not in the way you think. Do not go back to another 30 year loan even though the payment is lower because you can actually end up paying more. Keep the same payment you now have and it will reduce the term of the loan, saving you tons of money.
Randy Johnson, MBA, has been a mortgage broker since 1980 and has personally financed over $650,000,000 in properties. His advice is based upon over 2,200 transactions. His book, How To Save Thousands Of Dollars On Your Home Mortgage, is filled with even more good advice. He is a frequent contributor to many publications. Visit his Web site and learn more about Randy and his products.
More help from HSH.com
How much house can I afford to buy?If you're thinking of making the move from renter to homeowner, one of the first questions you need to answer is, "how much house can I afford?"
How To Avoid Problems At Your Closing"Closing" or settlement is listed as one of the top ten problem areas that occurs in a real estate transaction. This final step to your purchasing property can go smoothly -- if you take a few precautions beforehand. Knowing what questions to ask and reviewing all documents in advance of the closing day, will prepare you for a hassle-free and smooth closing. Can you learn to save money at closing? Yes, you can.
Preparing to Buy: Estimating the Costs of HomeownershipIt's pretty easy to budget for the roof over your head when you rent. Your monthly payment includes property repairs, taxes, and even some or all of your utilities. Budgeting when you're a homeowner isn't as easy. Consider these "hidden" costs when determining how much you can afford to spend on your new home.
Preparing to Buy: Saving for Mortgage ExpensesTo kick off the traditional home shopping season, HSH.com is presenting a series of articles entitled "Preparing to Buy." This is the first in the series and covers saving for the down payment on your home.
Will these documents satisfy my lender's ‘gift’ requirements?You'll likely need to get an OK from the mortgage lender that the documents are acceptable.