Today’s interest rates are the lowest they’ve been in about 50 years.  That means that if you’re looking to buy a home or refinance your current mortgage, you have a golden opportunity to save tens of thousands of dollars over the life of your loan.  However, things are certainly different than they were 50 years ago.  Plain and simple, the process of obtaining a loan has evolved over time which means, as smart homebuyers or homeowners, we need to keep pace with the changes.  Here are the ten most important things you need to know about refinancing or buying today.

1. Never sign a contract without knowing and understanding all terms of the loan.  Yes, I know this sounds elementary but I can’t underscore its importance.  You owe it to yourself to make sure you understand absolutely everything on all documents you sign.  Don’t be afraid to ask your mortgage professional to explain things repeatedly until you feel comfortable.
2. Insist on copies of all documents you sign.  This is just plain smart.  You’ll be able to review on your own time and catch any errors. (This is extremely helpful with a refinance as you have three days to cancel a refinance transaction for any reason if you are unhappy with the loan. This is known as the three-day Right-of-Rescission.
3. Get a second opinion.  Have your financial advisor or tax professional look over your loan documents.  They will provide you with peace of mind knowing that you’re getting a fair deal.
4. Do not succumb to pressure.  No reputable mortgage professional will ever try to talk you into a loan you’re uncomfortable with.  Refuse to pay a monthly payment that is above your comfort level.
5. Review your Good Faith Estimate (GFE) multiple times.  If you have any questions about fees or closing costs, speak up.  The new GFEs are a bit confusing so be sure you understand it fully.  Look for items such as possible interest rate changes, payment changes, prepayment penalties and balloon payments.  Your mortgage professional can assist you in pointing out any of these potential problems.
6. Work with a local, reputable mortgage professional.  Working with someone local makes it easier to meet in person as often as necessary. But you also need to make sure the professional you choose to work with knows what they are doing.  Don’t take a referral to a mortgage professional from someone who has never actually worked with them. 
7. Check out your mortgage professional’s background.  Are they licensed by the National mortgage Licensing System?  Are they a member of the National Association of mortgage Professionals?  Confirmation of these items will assure you that you’re working with an educated professional. Don’t be afraid to ask about their participation in continuing education and other certifications.
8. Get your “loan lock” in writing.  Once you’ve locked into an interest rate, request that you be given confirmation in writing.  If your rate has changed in any way, demand a new Good Faith Estimate and, again, review it thoroughly.
9. Never sign a blank form.  If anyone tries to convince you to sign anything with areas left blank, refuse.  Missing fees or costs that “will be filled in later” can wind up giving you not only a headache but may change your loan entirely.  Refuse to sign any blank forms.
10. If it seems too good to be true, it probably is.  Be wary of door to door, phone or email solicitations.  Buying cookies from the neighborhood kids may be a good idea but “buying” a loan from someone you don’t know and whose sole job it is to get you on the hook is a terrible idea.  Steer clear.

I hope these tips help you in find the right loan for your financial situation. Call me and I will be happy to help you with your financial situation!

Fred Arnold  661-505-4300,  This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Authors: Fred Arnold

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