Home loan rates may be a simple matter to some people. However, many people who have refinanced or purchased homes three or four times know almost nothing about selecting a mortgage.
This is particularly common with successful professionals who invest in property beyond the roof over their head. Their mortgage brokers or advisors don’t bother to explain loan terms to them either because they assume a level of existing knowledge, or they assume the client doesn’t want to be bothered with the details. This lack of knowledge begins the fast track to financial ruin.
Home loan rates have so many different aspects that most people don’t have the time or proper education to find good rates for their situation.
Some home loan officers are either so green or so averse to customer service, that they can’t or won’t explain the details of different loan products and rates. They see their job as overcoming objections to the product they are pushing on you (that is, the one that earns them the most money). On the good side, you may be able to use the loan officer’s strong motivation to close a deal by locking in a good home loan rate early in the process. Most people have quit a different experience with these loan officers, however. If you have no objections or questions, you learn nothing about the relative advantages of one loan package over the other.
Even if you have objections to home loan rates and terms, there is no guarantee you will get an education in the loan process that can help you make good choices.
Whether you decide to go it alone in finding a good professional mortgage broker and or a loan agent at a bank or other lending institution, you need to begin the process of selecting your loan type with the right questions. After that it’s a matter of deductive reasoning that will get you the best home loan rates.
The right question is one that first compels you to examine yourself and then guides you toward matching your situation and preferences with the economy. Because economic factors can profoundly influence what loan type is best for you, don’t be surprised if you find yourself changing your mind as you go through the loan selection steps that you should take.
It can be well worth your time and effort to educate yourself before you start the process of selecting a home loan rate and a home mortgage loan that best fits your financial situation.
Try to remember the logical place to start is by questioning your tolerance for risk. How much unpredictability in your mortgage payment can you handle comfortably? And if you take a risk, what is the potential reward? In asking yourself, “What is my tolerance for risk?” You are questioning both your financial and your psychological capacity to deal with varying payments. This will help you to decide on which basic type of loan is for you. The next step in the process is to educate yourself on fixed-rate home loans, adjustable rate mortgage loans (ARM), two step mortgage (Fixed interim-rate mortgage or FIRM), and a fixed balloon note.
Take a look at these different home loan rates and terms to compare what you feel will be the best type of loan for your needs. There is no reason to be sold on a mortgage that is not right for your financial situation.
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