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The Right Loan: More Than Just The Lowest Rate

By
Mortgage and Lending with Mortgage Financial, Inc.

It is always a challenge for homebuyers to select a suitable loan program that comes with a great interest rate. Rising real estate prices, a national shortage of housing and climbing interest rates has increased the pressure to make a quick decision about mortgage financing. But buyers who want the right loan with the best interest rate know that they cannot afford to hurry through the process.

Make sure to work with an experienced mortgage loan professional at an established and reputable company.  Ask other trusted professionals like your accountant, attorney or Realtor for a referral. Remember, you will be relying on your mortgage banker to explain loan options and recommend a loan plan that you can live with.  You need to discuss your long-term goals and the details of your personal finances in an atmosphere of trust.

Remember, the best loan is not necessarily the one with the lowest interest rate.  A lender might offer you a very attractive note rate, but additional fees can push the total Annual Percentage Rate up significantly. Another common problem is unscrupulous lenders offering a low rate but then hiding fees or labeling them as Paid Outside of Closing (POC) so that they do not add to the final totals on the good faith estimate. Be prepared to ask about the lender's charges for escrow waiver and appraisal as these are often marked POC or TBD (To be determined). The best-case scenario is to find a loan that combines a low note rate and low (and adequately disclosed) closing fees.

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