Tips and hints on getting a competitive rate
The best way we know of getting competitive rates when shopping for a loan is to have multiple lenders bid for your business. Remember, banks and lenders are competing for your business. These days it is easy to compare rates: use the web to compare rate information.
- Make sure you are making a fair comparison when evaluating offers from multiple lenders. Use the same parameters for all loan comparisons, for example, 30 year fixed with 0 points, or 5/1 ARM with 0 points.
- Get a good faith estimate from each lender. This document will itemize the cost of your loan.
- Ask friends for referrals to narrow down your list of potential lenders.
- Your realtor should also be a good source of referrals.
- Do watch out for PMI, or private mortgage insurance. If your loan-to-value ratio is higher than 80%, the lender will require PMI. Remember that PMI is insurance for the lender, not you.
- If applying as a couple and one of you has a higher credit score, do ask whether it will make a difference in the loan if you switch the order of the applicants.
- Each lender will want to pull your credit report. Try to bunch these credit pulls together, preferrably within a 14 day period.
- Be informed. Look at lenders' web sites for information about the main types of loans. Fixed rate loans and adjustable rate mortgages are standard fare and well-explained at most major lending sites. More exotic loans such as an option ARM or a negative amortization loan require a great deal of care: if you must tread there, do so very carefully. If you have any doubts or questions, make sure you get satisfactory answers before proceeding.
- Again, do shop around for your loan. Rates and costs do differ between charlottesville mortgage lenders.