Where to find the Best Lenders ("Top Lenders")
2007-10-08
Shopping around for a refinance mortgage will help you find the best deal. A mortgage, whether it’s a home loan refinance, mortgage refinancing, home equity loan, or second mortgage, is a product. Just like a new car or that new MP3 player, you should shop around for the best price and the best product for your needs.
With many refinancing loans, the rate and the terms are often negotiable, and you’ll want to compare all the costs that are involved. Shopping around and negotiating can save you thousands of dollars in due to excess fees, increased costs and higher interest rates!
Home loans are available from several top lending institutions: thrift institutions, commercial banks, mortgage companies, and credit unions. Credit unions are often the best places to refinance your mortgage or get a home equity loan. They have cost structures that generally undercut most commercial banks and mortgage companies. Using a mortgage broker is similar to using a car broker. For a nominal fee or percentage of the total loan (paid for by the lender), a broker can find the best lender for you. In other words, brokers have access to multiple lenders and can provide a large selection of loan products and terms from which you can choose.
There are certain things to keep in mind when working with brokers. Brokers are usually paid a fee for their services that may be separate from and in addition to the lender’s origination fees. Brokers’ fees may include additional charges in the form of points either paid at closing or added to your interest rate (or even both in some cases). You should always ask a broker how he/she is compensated and have it clearly defined and put in writing. These fees are also generally negotiable. Be aware that on any given day, lenders and brokers may offer different prices for the same loan terms to different consumers with the same loan qualifications. It’s important to know that the process is similar when working with commercial banks and thrift institutions as well. Since their agents often work on commission, their fees can usually be negotiated as well.
Once you have the broker put in writing the terms of the specific loan and their associated fees, see if the broker will waive or reduce any of these fees. When you are finally satisfied with the terms you have negotiated, don’t forget to obtain a written lock-in from the broker!