JimHungerford.com

Are you looking at buying or refinancing a home and are not sure what the best deal is for you?

 You are not alone!

Here is the skinny!! 

1)     First, IF IT SEEMS TOO GOOD TO BE TRUE, IT PROBABLY IS.  Mortgage money and interest rates all come from the same places, and if something sounds unbelievable, it’s better to ask a few more questions and find the hook. Is there a prepayment penalty? If the rate seems incredible, are there extra fees?  What is the length of the lock-in? If fees are discounted, is it built into a higher interest rate? 

2)    YOU GET WHAT YOU PAY FOR. If you are looking for the cheapest deal out there, understand that you are placing a hugely important process into the hands of the lowest bidder. Best case; expect very little advice, experience and personal service. Worst case; expect that you may not close at all. All too often, you don’t know until it’s too late that cheapest isn’t BEST. But if you want the cheapest quote – head on out to the Internet, and we wish you good luck.  Remember that the cheapest rate on the wrong strategy can cost you thousands more in the long run. This is the largest financial transaction most people will make in their lifetime.  

3)    MAKE CORRECT COMPARISONS. When looking at estimates, don’t simply look at the bottom line. You absolutely must compare lender fees to lender fees, as these are the only ones that the lender controls. Be sure to check that lender fees are not “hidden” down amongst the title or state fees. A lender is responsible for quoting other fees involved with a mortgage loan, but since they are third party fees – they are often under-quoted up front by a lender to make their bottom line appear lower, since they know that many consumers are uneducated and simply look at the bottom line!  APR?  Easily manipulated as well, and worthless as a tool of comparison. 

4)    UNDERSTAND THAT INTEREST RATES CAN CHANGE DAILY, EVEN HOURLY. This means that if you are comparing lender rates and fees – this is a moving target on an hourly basis. For example, if you have two lenders that you just can’t decide between and want a quote from each – you must get this quote at the exact same time on the exact same day with the exact same terms or it will not be an accurate comparison. You also must know the length of the lock you are looking for, since longer rate locks typically have slightly higher rates. 

5)    UNDERSTAND THAT INTEREST RATES AND CLOSING COSTS GO HAND IN HAND. This means that you can have any interest rate that you want – but you may pay more in costs if the rate is lower than the norm. On the other hand, you can pay discounted fees, reduced fees, or even no fees at all – but understand that this comes at the expense of a higher interest rate. Either of these balances might be right for you, or perhaps somewhere in between. It all depends on what your financial goals are. A professional lender will be able to offer the best advice and options in terms of the balance between interest rate and closing costs that correctly fits your personal goals. 

1. Rates – Fixed or adjustable
2. Discount Points - are fees paid to the lender or broker for the loan and are often linked to the interest rate; usually the more points you pay, the lower the rate (buying rate down).
3. Loan Origination Fee – fee paid to lender/broker in form of a percentage of loan amount or flat fee for processing the loan
4. Fees - A home loan often involves many fees, such as processing or underwriting fees, broker fees, and transaction, settlement, and closing costs. Every lender or broker should be able to give you an estimate of its fees

Mortgage worksheet that helps you clarify the closing costs a lender has control over: 

  Whether you are dealing with a lender or a broker may not always be clear. Some financial institutions operate as both lenders and brokers. And most brokers’ advertisements do not use the word “broker.” Therefore, be sure to ask whether a broker is involved. This information is important because brokers are usually paid a fee for their services that may be separate from and in addition to the lender’s origination or other fees. A broker’s compensation may be in the form of “points” paid at closing or as an add-on to your interest rate or both.

To help you find the right financing, you want an experienced person with connections to competitive rates and a wide range of programs. That would be Jim Hungerford (CELL 971-226-8403), serving California, Oregon and Washington