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Shopping for a mortgage quote

While you are looking for a mortgage quote never make the mistake of jumping into the first quote that comes your way. You must spend time and effort to look around for the best quote with the best rate of interest and the most suitable mortgage terms before you finalize on the loan. There are innumerable mortgage companies offering loans so it should not be a big problem to hunt for the best company from where you could take the mortgage loan after a judicial screening and comparison of all the mortgage quotes.

Here some important tips which can help you find the right mortgage quote which is most suited for you:

Never settle for the first quote that you receive. Shop around for the best quote – since there are a lot of companies competing with each other for giving loans, this should not be a very difficult task.

Never get swayed by the ‘apparent’ low interest rates. Try and read the fine print before you approve of the mortgage quote.

Try and ask yourself a simple question. Why would a profit-making lending institution offer you such low rates of interest? Obviously to lure customers to link up with them, and most likely they are incurring some kind of financial loss by doing so. So, how are they recovering their loss? By the phrase called long term ‘tie-in’, an essential part of the agreement. Tie-ins are nothing but the heavy penalty you have to pay them, in case you decide to switch to another mortgage lender. Some lenders even would ask you to buy their insurance policies, if you wish to avail of the low rates of interest.

This brings us to the topic of redemption penalties – heavy sums of money which you have to pay to the lending institution, in case you decide to switch over to another lender during the tenure of your loan. You have to pay this redemption penalty, even if you decide to discontinue liaising with this particular lending institution. This penalty is deemed to recover the losses which the lending company has incurred in terms of time and expenses, if you decide to leave. Since many lending companies almost hide this clause from the agreement, giving it in fine print, it is your responsibility to ask for information about this point.

Some unscrupulous lending companies charge the borrower for the mortgage quote. Remember, large and reputed organizations never charge anything from the borrower, in this competitive environment.

Getting a mortgage quote does not, in any way, make it obligatory for you to avail of mortgage loans from the quoting company. Most reputed companies know that an average borrower is shopping for the best quote and terms and they offer their best quotes to grab the customer. But, you are free to choose any company which suits you best. It is not essential that you hide your loan shopping spree from lenders. You can always tell them that you are on the look out for the best quotes, rates and terms. There is nothing secretive about it.

Finally you must keep in mind that shopping to get the best quote and rate is not a task which you can complete overnight. It takes time and patience. After all it is a question of a long term investment, which you are making to buy your home.