< Read Another Article The Loan Process Part 1 – Shopping for a Loan  Did you ever find yourself getting into something you knew was really important, and you knew you just had to do it, but at the same time it made you uneasy since you hadn’t "been there, done that" before? That’s the loan process. But take heart! Even though your second and third time around makes you nervous too, this information will help. We’ll go over shopping for a loan; loan application; pre-qualification and pre-approval; loan approval; locking a loan; loan documents and recording the documents. So let’s start with Shopping for a Loan! The absolute best way to find a good loan is to start with a good loan agent. The two go hand in hand. Referral is an excellent choice through one of your friend’s or family. You know them, they know you, and you know they’re not going to steer you wrong. But, whether you start with someone you know or not, you should ask some basic questions. Such as, would you provide me with references? How long have you been in the business? Will you send me a fully completed "Good Faith Estimate" with your loan application? Will the final costs vary by more than five percent? When can I lock the rate, and how long is the rate lock good for? Without a doubt, a good loan agent will have plenty of references. Ask for two or three, and call them. Generally speaking, it is better to work with someone who has been in the mortgage business through at least one cycle of rates being low and high.  Right now that means someone who has been a loan agent since February ’94. These seasoned loan agents will likely be committed to service, have a good work ethic, and will be excellent starting candidates. The law requires all brokers, and bankers to provide a "Good Faith Estimate". This must be in writing, along with a "Truth In Lending" disclosure as well. Law requires lenders provide these disclosures within three business days of their receipt of your loan application. These disclosures are intended to give you the basis for the costs of a given loan. If a loan agent is willing to send you a fully completed Good Faith Estimate, and Truth In Lending disclosure with the loan application, or in advance, this is a positive sign that you are working with a credible agent, and company. Make sure to get a Good Faith Estimate from more than one company. Compare the costs and ask questions about any differences. By this time you will have a good sense of who wants your business, and whom you want to deal with. Find out when you can lock the loan, and what the rate is. It should be very close to the Good Faith Estimate. During this period of financing, you should track rates. To do this, pay attention to the bond market. If the price of bonds go up, rates go down and vice-versa. Don’t confuse however, the price of bonds with the yield. While the price of bonds, and rates move conversely, the yield, and rates always move in the same direction. Rates change daily. Since rates are based upon the price of bonds, and the yield curve, they are a simple, accurate way for you to track their course, and thereby know where rates are headed. Simply mark down on a note pad the price of bonds, and or the yield the day you start calling for rate quotes. From there, follow the trend. You can get this bond, and yield information from the front page of the Money, or Business section of nearly any newspaper, or online. You are now well on your way to dealing with a reputable loan agent, and one who is going to help you find the right loan that meets your needs. < Read Another Article

Action Home | Financial Calculators | Interest Rates | "Easy App" | Mortgage Library | Newspaper Articles | Contact Us