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How To Get a Mortgage Loan

1. Find a lender. Ask friends, family or co-workers for referrals; speak with local real estate agents; search the Internet.

2. Fill out a loan application.

3. Get an estimate of closing costs from the lender you choose. By law, the lender is required to provide this statement to you within three days of receiving the loan application. Make sure to ask what type of loan program your lender has selected for you, including the rates, terms and any special information, such as prepayment penalties.

4. Compare costs, fees and terms of loans if you are working with more than one lender.

5. Negotiate fees. Sometimes you can negotiate the amount of fees or loan points (a point is 1 percent of the loan amount) the lender charges you.

6. Consider lowering your interest rate by paying more points. The relationship of interest rate to points paid is an inverse one; the more points you pay, the lower the interest rate.

7. Provide required documentation.

8. Pay any up-front fees. Sometimes the lender requires that the appraisal, credit report or processing fee be paid at the beginning.

9. Review loan papers. Approximately one week prior to closing, loan papers will be ready for your review. Make sure the loan matches the original quote you were given.

10. Sign your loan papers and deposit your down payment funds into your account four to six days prior to closing.

11. Bring a cashier's check for the down payment to the title company, escrow company or attorney handling the closing. The lender will send the title company a check for the loan amount.

12. Get ready to congratulate yourself. Once the transaction closes and you have signed off on all contingencies, and received a copy of the deed and a set of keys, you own the home.

How To Refinance Your Mortgage

1. Check the payoff. Even with a lower rate, a new mortgagee isn't always the best move.

Time at home. One bit of conventional wisdom claims if the refinance interest rate isn't at least one percentage point below your current rate, it doesn't make sense to refinance. This is most relevant if you don't expect to be in your current home much longer. It's not worth the closing costs or taxes if you're only going to stay in the house for two more years.

No debt reduction. Refinancing doesn't get rid of debt it just restructures it. So it's important to weigh your overall savings against the time it will take to compensate for the cost of refinancing, which usually ranges from 3% to 6% of your outstanding principal amount. You can test scenarios using our Refinance Calculator.

2. Set your expectations. Refinancing can save you money in the long run, but it's not a cure-all, and it doesn't happen quickly.

New safeguards means more time to refinance. In the post-financial crisis world, there are more precautions in place to deny fraudulent refinancing. While that's good news generally, it means more paperwork, and probably a longer time to closing, for a legitimate refinancing. So gather as much documentation as soon as you can and be patient.

Consider mortgage length. If you're only going to stay in the home for only a few more years, an adjustable-rate mortgage with a favorable cap on interest rate increases may be an option to consider. But, if you want security, a 15 or 30-year fixed-rate mortgage is a better bet for mapping out fixed payments.

3. Shop around. Prices, rates and packages will vary from lender to lender.

Don't discount your original lender. The company may waive some of the costs of refinancing, and it could be a speedier process, since the lender already knows your history. Still, there's a chance that you might not get a competitive rate, so only approach your current lender after you know what others are offering.

Try an upfront mortgage lender. Upfront mortgage lenders (UMLs), such as Amerisave or National Mortgage Alliance, disclose their fees upfront, allowing you to shop anonymously by entering minimal personal information at their websites. This makes the shopping process less stressful and helps avoid making you the target of refinancing solicitors. Of course, when shopping around, be sure to check the credentials of the lender, to make sure the firm is up to date with current regulations.

Ask a mortgage broker. If you don't want to deal with a slew of lenders, mortgage brokers are an alternative. A broker could be able to get you special packages or unique loans from wholesale lenders. But make sure the broker is knowledgeable and that his or her fees aren't excessive. There are also upfront mortgage brokers.

4. What not to do when looking to refinance your mortgage:

Don't go with the loan provider who solicits you. Homeowners should be weary of lenders who come knocking at their door. Rather, select a lender when the time is right for you instead of allowing a lender to convince you it's time to refinance.

Don't over-emphasize monthly payments. What you pay each month isn't as important as what you owe. It's easy to get distracted by a lower monthly payment. Remember to consider the extended payment period and the total cost over the long run.

Don't make big changes. Once you enter the refinancing process, it's important to maintain the status quo, credit-wise. Lenders have eagle eyes when it comes to monitoring credit and even a $100 purchase that's out of the ordinary could derail refinancing.

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Call Christine 408.438.2350

Christine Diep

2678 Glen Hardy Ct.
San Jose, CA 95148
(408) 438-2350

CA DRE License # 01391554
CA NMLS License # 847496

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