Work with a lender who has many options as to where to place your home loan. If you go directly to the bank on the corner they have exactly one option. Working with a mortgage company allows you to shop your loan and get the lowest interest rate. Here at First South Mortgage we can pick and choose from the top ten banks in the country. Also, since we are a full eagle lender, we can process your loan in house if that generates the lowest rate possible
Work with a lender who is not overly greedy. Some mortgage companies tell their loan officers that they need to make (x) amount of dollars on each loan. In this case, they are not looking out for your best interest. What happens if you have a small loan? Other banks have sort of a one sided relationship with their loan officers where the house takes 66% of the money. The poor loan officer has no choice but to charge you extra in order to make the same money per file.
Work with a lender who doesn't have their loans spoon fed to them by a Realty Company or a builder. Quite often in this type of relationship where there is a kick back or affiliate relationship that takes place which forces the loan officer to charge you a little more in order to make his normal fee.
Work with a lender that doesn't have too much overhead. You have better chances of getting a low interest rate if your lender doesn’t have too pay for offices and staff all over the country.
Understand the day to day changes in the financial markets and know how they will effect your loan. Usually a good day in the stock market is a bad day for interest rates and vice versa. If you time your lock well that might translate into an eighth better on the interest rate.
Whenever possible, I like to take advantage of a short term lock. Mortgage rates have been relatively flat for the last year.Our lock increments come in 15 day time periods. The shortest lock offers the best terms for the borrower.
Don't waive escrows. This is your option when you have a loan under 80% loan to value but it costs .25% to fee when you do so. If the broker has to absorb this, that may effect your pricing.
Don't be afraid to buy points. If you intend to stay in the home a long while it can make sense. Also in many cases the point is tax deductable. Do a cost/benefit analysis of paying the point or not paying the point vs the increased closing cost.
Believe it or not the state you live in will have an effect on pricing. This could be a little out of your control but it does weigh into the equation.
Credit score, credit score, credit score. The absolute best pricing comes with a middle credit score of 740 or better. As the scores drop, the rate goes up. (this does not apply to FHA so much)
Try not to take cash out if you can help it. There are very large adjustments for cash out which are also sensitive to credit score. There is actually a trend in our country where one third of borrowers are doing "cash in" refinances.
Live in the house. There are big adjustments for investment properties.
Buy a single family residence. Some lenders don't like condos and especially high rise condos
Prove your income. The days of stating income are pretty much gone but if you want to state income, be prepared to pay some points.
Get your loan closed on time. Respond to requests for information from your loan officer as fast as you can. If your loan gets to the end of the process and you need to extend the lock, somebody has to pay for it.
Don't get carried away with interest only or 40 year mortgages. These types of loans were sort of a fad 5 years ago but now many of the homeowners who took them out wish they didn't. Whenever we do this type of loan there is a hefty rate adjustment that only hurts you in the long run.
Beware of mortgage companies that do 100% of their business on-line. Quite often these types of operations have the attitude of "burning and churning" or that of a hunter rather than a farmer. At First South Mortgage we hope to plant little seeds of happiness with every customer so it comes back to us in the form of referrals. Because we strive to receive your referrals, our goal is to make you so happy with the service that you received, you will be more than happy to refer our name to friends and family as you go on through life.
