Shopping Around for an FHA Lender
Lender Standards May Vary
Do you know how much an FHA lender charges for discount points? Do you know if there is a special procedure for paying off your loan early?
FHA loan rules say you can’t be charged a penalty for early payoff, but the lender may specify a certain procedure for that final payment--you should know what that is if you plan to refinance or pay the mortgage off ahead of schedule.
Then there’s the type of mortgage you need--some lenders may not offer specific kinds of home loans because of low demand or other factors. Does the FHA lender offer the type of mortgage you need at an affordable interest rate? Once you compare offers you will have a better idea of what the market currently supports and how much you should expect to pay.
Rising Rates, Rising Closing Costs
What do the lenders you are comparing prefer to do in situations where rates trend higher? Some banks change the interest rates, but others choose not to, upping your closing costs instead.
If you don’t know which approach a given lender takes, you may not know how to make a fully informed decision about some lenders. Do you prefer a higher rate? Increased closing costs?
Nobody WANTS to pay more, but deciding ahead of time what suits you (or what is totally irrelevant to you as the case may be for some) is important. Not all borrowers worry (or even need to worry) about this sort of issue, but some do.
Are you a first-time homebuyer? If you answered NO, are you sure? That may sound like a silly question, but the rules in this area aren’t as obvious as you might think. When shopping around for an FHA lender, it’s important to ask what, if any, first-time buyer perks or options you have from the lender or from a state program that could offer help.
Some lenders choose not to participate in first-time buyer programs. Others do. Until you shop around you won’t know for sure whether you’re getting the most out of your home loan in this area.
Some, but not all lenders define a first-time homebuyer as someone who has not owned or had an ownership interest in a primary residence in the last three years. Even if you have owned property before, you may qualify as a first-time buyer.
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