Home Purchase Mortgage Calculators
Mortgage Program Calculators
Getting a lender referral from a friend, colleague or realtor can be helpful but that should not be the only reason to select a lender. Borrowers should shop multiple lenders to find the best loan terms, which means the lowest combination of mortgage rate and closing costs. Too often borrowers fail to shop around and rely solely on a personal referral to choose a lender. Paying a higher mortgage rate or closing costs can end up costing you thousands of dollars. You may end up selecting a lender that someone refers you to but make sure to explore other options including different types of lenders such as banks, mortgage banks, mortgage brokers and credit unions.
You can use the table below to compare mortgage rates and costs for leading lenders in your area. Shopping multiple lenders is the best way to save money on your mortgage.
The best way to save money on your mortgage is to compare quotes from multiple lenders. A study showed that people who compared five mortgage quotes saved an average of $3,000 on their mortgage. People who only compared two lenders saved an average of only $1,400 on their loan. This means that people who only contact one lender are probably spending too much money which makes this a definite mortgage don’t.
You comparison shop to find the best deal on a car, hotel or television and shopping for a mortgage is no different. When you request a quote from a lender you can ask the lender to not pull your credit report so your credit score is not negatively impacted. Reducing your mortgage rate by as little as 0.125% can save you thousands of dollars in interest expense over the life of your loan so comparing mortgage quotes is certainly a smart move for borrowers.
Our personalized mortgage quote feature enables you to compare proposal from multiple lenders. The form is free, easy-to-use, requires minimal personal information and does not impact your credit score.
If you have submitted your loan application and you are also considering a job change, you should wait until your mortgage closes before you change careers. Changing jobs during the middle of the mortgage process can cause delays or even result in your loan being rejected. For example, if your new job has an initial probationary or trial period you may be required to with until the trial period is over before the lender approves your loan application. If the new jobs negatively impacts your earnings or changes your type of employment -- for example you become self-employed -- this can also adversely impact your loan application. In short, wait until your loan closes before you make a career move.
It is generally a bad idea to make a significant purchase while your loan application is in process. Making a significant purchase, such as buying a new car, can affect your credit score and also deplete your financial reserves. After you have submitted your mortgage application, it is best to keep a low profile financially. The car or other big ticket item can wait until after your mortgage funds.
Applying for another loan, such as a personal loan, car loan or new credit card, prior to your mortgage closing is another huge mortgage don’t. Applying for loans can cause your credit score to go down which can result in you paying a higher mortgage rate, which can end up costing you a lot of money in the long run. Additionally, any new loan payments are included in the debt-to-income ratio that the lender use to determine what size mortgage you can afford. In a worst case scenario, adding new debt expense may prevent you from qualifying for the loan.
While the lender determines what size mortgage you qualify for, it is the borrower’s responsibility to make sure they can afford the monthly payment and other housing-related expenses such as property taxes and homeowners insurance. Just because a lender qualifies you for a certain loan amount does not mean that is the right mortgage for you. You should make sure that you are comfortable with the monthly payment and that the mortgage fits within your financial budget and priorities. Getting a mortgage you cannot afford is one of the biggest and most costly mortgage don’ts so make sure you select the loan amount that works best for you.
Use our Mortgage Qualification Calculator to determine what size mortgage you can afford based on your monthly gross income and debt expense
It is very important that you understand how your mortgage works. With a fixed rate mortgage, this is relatively straightforward because you make the same monthly payment until your loan is paid off. The interest rate on a fixed rate mortgage also never changes. With other loan programs, such as an interest only mortgage or adjustable rate mortgage (ARM), your mortgage rate and monthly payment are subject to change and increase over the term of the loan. A sudden jump in your monthly payment can result in serious financial hardship.
Understand What Mortgage Program is Right for Me?
Make sure to fully understand the mechanics of the mortgage program you select. The monthly payment and interest rate you pay initially when your loan closes may end up increasing significantly over the course of your mortgage. Knowing how your loan program works from start to finish helps you avoid surprise payment spikes in the future.
Simply put, lying on your mortgage application is fraud which is a federal crime. Don’t lie on your application as this can result in significant penalties including fines and jail time. Some borrowers feel that they need to stretch the truth on their application to qualify for a loan but mortgage fraud ultimately costs you much more.
Borrower Don't Shop for Mortgages: https://www.consumerfinance.gov/about-us/blog/nearly-half-of-mortgage-borrowers-dont-shop-around-when-they-buy-a-home/