A major determining factor in selecting a lender is assessing the cost of the mortgage loan. But just how do you determine the cost of a mortgage loan? Many factors shape the cost and here’s what you should consider:
Really shop your mortgage loan.
That means looking at different lenders. How do you know if you’re getting the all-around best deal unless you look at others and compare?
Get real about the fees.
There is more to look at than just interest for your mortgage loan. There is the appraisal, principal, miscellaneous fees (processing, etc.), discount points and interest rate. It’s important to look at the whole package prior to making a decision. Just because you may have a low interest rate doesn’t mean that’ll be the best loan for you in the long run.
Ask questions regarding down payments and private mortgage insurance.
Some lenders may require the full 20 percent of the home’s purchase price as a down payment, but many lenders offer loans that require less money down. Ask whether the loan you’re considering requires a down payment, how much the down payment is and if private mortgage insurance (PMI), which is a way to protect the lender against a loss if a borrower defaults on the loan, is needed.
Remember to shop lenders, compare costs and terms and negotiate to get the best deal you can. Getting the best financing deal can save you thousands of dollars!
Christine is the Content Marketing Coordinator for Homes.com. She's a small town girl at heart, who currently lives in Norfolk, VA with her husband and their fur baby. When she's not working, she enjoys cooking, decorating, traveling, and binge watching Netflix. As a proud Virginia Tech alum, she also loves cheering on the Hokies!
