The mortgage industry has undergone a major change within the past two years. Programs that were once available, no longer exist. With limited options available, finding the best fixed rate mortgage is more important than ever.
Best Fixed Rate Mortgage - A How to Guide
Only a few years ago it was easy to find a fancy loan program which would allow a remarkably low payment on a rather large loan. Remember those advertisements for 1% mortgages? It was actually possible to finance a loan for $150,000 and have a payment of less than $500 per month. Well, those programs are all gone leaving most people with only two choices. A 30 year fixed or a 15 year fixed mortgage. In addition, the fallout from these high risk loans has moved many consumers towards these more conservative fixed-rate products.
So, what is the most effective way to find the best or cheapest fixed rate mortgage? The Internet will be your most valuable tool for finding and comparing rates. Unfortunately, it's not as simple as picking the lender with the lowest rate. There are other factors which must be considered to ensure you are getting the best deal. How do I know if the lender's rate and closing costs are legitimate?
The mortgage industry is one of the most regulated businesses. Despite that, it also has the highest level of fraud (as we have learned during the past two years). The most common consumer complaint is deceptive advertising. The lender advertises a specific rate and you decide to make an application. Later, at the closing you discover the rate is different than what you were told. It's too late to do anything at that point as it would be too costly to start the process over again with another lender.
Another common problem is misrepresentation of the closing costs. The lender you selected may have the cheapest costs, but many times you might find out at the closing that they have increased significantly. Again, it's too late to do anything about it and you are stuck.
Applying for a mortgage is the largest financial decision most people make. In an attempt to find the best fixed rate mortgage, many people will go about the process without an understanding of how to do it correctly. Doing so can be a costly mistake which can affect you for the next 30 years.
The key to success is knowledge. Learning how to find reputable lenders who have consistently lower rates, how to make banks compete with each other and understand the good faith of all assessment is critical when you are shopping for the best fixed rate mortgage. A simple mortgage guide or manual is your best source.
J. Pisicchio is a mortgage consulting professional with more than 20 years industry experience. While working for small banks & large institutions (Chase) he was formally trained as Credit Analyst. He has spent his entire professional career educating consumers about the mortgage process so that they can make the best possible financial decisions when applying for a loan. For more information about how to shop for a mortgage visit http://www.homeloanfinancingsecrets.com
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