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How To Get A Home Loan

Leaning how to get a home loan the right way is really important. 

Many people, especially first timers, just go to their local bank and then wonder why they have higher interest rates and payments than their friends. The reason is that they don’t go about gettiing a home mortgage the right way!

Here’s the “how to get a home loan” process in a nutshell…

… You get a home loan by selecting a finance company or bank that you want to borrow money from.  That company or bank is usually referred to as “the lender.”  You will be assigned a representative of the lender’s institution to handle your mortgage loan application. These representatives are generally called “loan officers” but the title can vary from lender to lender.

Be sure to contact multiple lendors… It’s important to contact more than one lender and to evaluate the differences in their loans because it may save you a lot of money and/or hassels over the life of your home mortgage.

When you contact the lenders, complete their loan applications according to their instructions. It may cost you a few extra applications fees but it may ultimately save you tens of thousands of dollars over the life of your home mortgage. 

Then you usually submit your loan application along with any application fee required to your assigned loan officer at each of the lenders. You need to be aware that your loan officer is the representative of the lender’s institution.  Decisions that your loan officer communicates to your are generally final and unless there was something very wrong, there is no appeal to those decisions.

The loan officer will process your home loan application.  The loan officer will represent their institution with respect to your loan application.

Finally, after a decision has been made, the loan officer will let you know whether or not you loan has been approved.

Then, when all the approvals are in, you select which one you want to  borrow from.  Be careful here… the loan offers are usually valid through a specific date or for set number of days so if you have a lender that isn’t finished processing your application by a certain point, you may need to drop them from consideration.

I suggest that you wait until this point to you negotiate interest rates,  payments and baloon payments.  You will probably need to show the approval letters to your loan officers. I suggest that you don’t let them copy them where possible.  Be sure that you are not violating any terms of service that you signed as part of the application process if you do so. They generally will not negotiate unless they are about to lose writting the loan.

As an initial starting point, I suggest that you contact potential lenders online rather calling on the telephone.

Why?  Three reasons. 

First, when you investigate online, you will usually be able to get more information faster.  And, the information is, as a general rule, already organized and quite complete. Which means no bouncing around between subjects and possibly not remembering to ask important questions. 

Second, You will have time to think about the information and make a list of additional information you will need to make your decisions.

And, third, you will be able to do a preliminary screening of the lenders before you talk to anyone.  You won’t need to go through the annoyance of telling them that you are not interested in their company or of having them try to convince you that you should work with them. 
 

Be prepared!  Do your due diligence when selecting a lender and you probably will find that leaning how to get a home loan the right way is worth thousands of dollars to you.