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Updated Sep 19, 2013 - 12:11 am

Shopping for a home loan

Before you shop for a loan, it’s good to understand what lender fees are typically charged to close a loan transaction. (Learn more here.) After you know about closing costs, you’re ready to:

1. Find a mortgage professional at a reputable lending company

2. Define the loan program that works best for you

3. Analyze loan terms based on rate, points and fees

Knowledgeable, professional loan officers do more than just quote interest rates and costs; they listen to your needs, research potential loan solutions and guide you into the best loan program. Do not forgo a qualified loan officer for loan terms that may be only slightly better. The financial choices you make with your lender stay with you for the life of your loan.

Your best loan program is determined by several variables:

• The length of time you expect to stay in your home so you can choose between a long-term, adjustable rate loan at a lower interest rate, or a fixed rate loan at a higher rate.

• Your income, assets, home equity and FICO® Credit Score qualifying you for a conventional, FHA or other loan program.

• Your income stream, cash reserves and comfort level with loan terms of 15, 20 or 30 years and their corresponding interest rates and payments.

Annual Percentage Rate (APR) is a formula that incorporates interest rate and closing costs into a single number. APR includes interest rate, discount points and lender fees in the calculation, making it easier for you to compare costs across lenders.

When you contact lenders to shop rates, compare rates on the same day for the same lock period. If the market is unstable, lenders can change rates many times throughout the day. Both your credit score and the equity you have in your home (Loan-to-Value) contribute to the interest rate for which you are eligible. To promote a fair comparison, give the same information to each lender you interview.

For more advice on finding the best home loan, access our free eBook, How to Get a Stellar Home Loan: Six Steps to the Best Mortgage at the Lowest Rate with the Fewest Headaches.

Galaxy Lending Group, LLC: NMLS ID 142766, AZ Lic. MB-0919491.


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