Here are some practical things to consider when getting a home loan.
- Say NO to “easy money.” Beware if someone claims that your “credit problems won’t affect the interest rate.” If an offer is really appealing, get it in writing and then seek a second opinion.
- Shop around. Always talk to several lenders to find the best mortgage loan you qualify for. A mortgage loan product or lending practice may seem reasonable until compared with a similar mortgage loan product offered by other lenders.
- Find out about prepayment penalties. Know if the mortgage loan offered to you includes a fee if you pay off your loan early. If it is a requirement of the mortgage loan, you may want to ask about other products that do not contain a penalty.
- Make sure documents are correct. Beware of anyone offering to falsify your income information to qualify you for a mortgage loan. Never falsify information or sign documents that you know to be false.
- Make sure documents are complete. Do not sign documents that have incorrect dates or blank fields. Be wary of promises that a professional will “fix it later” or “fill it in later” after you’ve signed.
- Ask about additional fees. Make sure you understand all of the fees that are part of your mortgage process. Question any items you didn’t request or know about prior to the time you are asked to sign the mortgage loan documents.
- Understand the total package. Ask for written estimates that include all points and fees. Compare the annual percentage rate (APR), which combines a loan’s interest rate with other fees charged by the lender over the life of the loan.
- Work with legitimate credit counselors. Beware of scam credit counseling and credit consolidation agencies. Get all the facts before deciding to combine credit card or other debts into a mortgage loan.
- If you’re not sure, don’t sign! Get advice first from a reputable consumer credit counseling agency or housing counselor.
For a complete overview of the mortgage process, check out “Your Step-by-Step Mortgage Guide”.