3 THINGS TO KEEP IN MIND WHEN SHOPPING FOR A MORTGAGE LOAN

June 5, 2012 Posted by Andre Hemmersbach

To get the best mortgage deal:

 1.      Compare apples to apples.

·        Shop loans on the same day comparing the term, rate, points and the total fees as rates are like stock prices….they change by the  hour. Always get a written GFE “Good Faith Estimate.” Remember even though your GFE it is in writing your terms are not set in stone until you are locked and approved (See bullet #3).  Receiving a GFE as part of your quote is the law!

·        Compare the APR. The APR or “Annual Percentage Rate” was devised by federal regulators as a way for consumers to shop terms of financing. It is an adequate method of comparing loans but know that it can be manipulated. For instance, even loans with the same start rate, same points and fees can have different APR’s. On an
Adjustable Rate Mortgage (ARM) or intermediate ARM an APR can fluctuate as much as 1.5% depending on the margin and index of the loan. On fixed rates mortgages, APR’s can be manipulated because by law, only certain fees have to be included. Loan Officers can legally quote small or no prepaid interest which would falsely lower the APR and your real closing costs (See bullet #3.) Receiving an APR as part of your loan quote is the law!

2.      Make sure the program you pick meets your short and long term financial goals. Even within the same program families (Fixed verses Fixed or ARM verses ARM) there are other considerations. No Cost, No Cost / No Fee or interest only payment programs can save you upfront closing costs, payments or give you security but may cost you thousands of dollars in the long run. Some of following questions should be asked by a good loan officer to determine whether the product fits your financial goals and situation:

§  Holding term

§  Tax bracket

§  Financial goals as they relates to retirement, college funding or risk philosophy

§  Principle reduction pay-downs

§  Alternative investment options including 401K, stocks and bonds.

3.      Use a DRE “Department of Real Estate” Licensed Loan Officer that has been seasoned, comes highly recommended and you trust implicitly. For Licensee information you can check using the Department of California web site at: https://ui.constantcontact.com/rnavmap/em/ecampaign/www.dre.ca.gov (click on the yellow link in the middle of the page titled “Real Estate License Lookup”, you will have to enter the loan officer in the following manner: last name, first name. Try my name: “hemmersbach” and “andre”. It will give you information on how long your loan officer has been licensed and if they are in good standing) Some institutions, Federally Chartered Banks and Savings & Loans for instance, do not require their employees to be licensed, this means you could be dealing with someone who is inexperienced, could not pass the exam or just does not feel that educating or licensing himself is important.

4.      PLEASE use me as an unbiased third party opinion to review any Good Faith Estimates, Lender Approvals or Loan Documents even if you have decided not to use my services on your current transaction. I offer this service free of charge and as method for improving the reputation and goodwill in the Lending Industry. I would be honored to assist you!

The reasons I feel that my services, programs and rates are better than anyone else out there on any given day:

 §  My Degree in Finance makes me qualified to look at, explain and help you understand your choices of lending programs and how they will affect your financial goals.

§  My 21 years of experience in the Mortgage Banking industry means I have the experience and knowledge to get you approved and funded with the least amount of hassle possible.

§   I am licensed through the California Department of Real Estate since 1988 and am in good standing.

§  American California Financial is one of the most respected and oldest brokerages in the Los Angeles area, guaranteeing you that we will be here for your questions, advice and future transactions.  

§  We are approved with over 60 different institutions, which means you will get the most competitive rate and program available.

In deciding to buy a home you are making one of the smartest long term financial decisions a person can make. You will also, in all likelihood, be creating the largest debt of your life. The above items are a short list of things to consider when researching your financing options. Make sure you are seeking the guidance of a trusted advisor!

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About Andre Hemmersbach

Andre Hemmersbach has been working in the mortgage banking business for over 20 year helping people successfully finance their real estate holdings. He can be reached at (310) 540-1330 #137.

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