Mortgage shopping tips
If you're shopping for a mortgage, we'd love to help. Here are some tips we've compiled to get you started:
1. Know the difference between a mortgage lender (like Webster) and a mortgage broker
Mortgage brokers do not lend money; they find mortgage lenders for their customers. As a result, they also charge a fee. Also, mortgage brokers don't always make it clear that they are brokers rather than lenders, so be sure to ask questions when you’re shopping around for a mortgage.
2. Shop around using the same loan amount, term and type so you can effectively compare mortgages
Also, for an adjustable rate mortgage, ask mortgage lenders to calculate how much your monthly mortgage payments will be a year, 5 years and 10 years from now.
3. Don't assume credit problems will disqualify you from obtaining a mortgage
Be upfront with your lender who can review your financing options and/or guide you to appropriate assistance, if necessary.
4. Remember, mortgage prices change daily or even multiple times during the day (generally during volatile economic times)
To accurately comparison shop, you have to compare mortgage terms on the same day. If you need time to review your options, shop on Fridays, since those mortgage prices will generally hold until Monday.
5. Lock in your mortgage rate
Once you've shopped around for the best mortgage rate and negotiated the terms of your mortgage, ask for a written lock-in to protect you from an increase in the rate while you complete the mortgage process. It is important to remember that once you lock, you have committed to that rate even if rates after lock in.
6. Know what type of down payment and mortgage you can honestly afford
Calculate your monthly expenditures to make sure you will be able to pay your mortgage, taxes, insurance, maintenance and utilities for several years. Like all good shoppers, you don't want to spend more on a mortgage than you can afford.