How To Save Thousands Of Dollars On Your Home Mortgage

By:Randy Johnson

1. Lenders are a lot smarter than you about mortgages. To improve your odds, you need to get an education, (like reading my book) to develop the power you need to negotiate a better deal.

2. Get your credit report with credit scores and correct any mistakes before applying

3. Do not simply call a bunch of lenders and ask, "What are your rates?" Many lenders quote programs which are designed specifically to snooker the telephone rate shoppers. It will "sound good" because it was designed to "sound good." Some loan reps purposely lie to phone shoppers in order to induce borrowers to apply with them. You are not smart enough to catch them.

4. Your objective is to find a lender you can trust. You'll find such a person through referrals from your friends, co-workers, and neighbors who are homeowners, not the Yellow Pages. You want to find a Loan Rep who will help you and, if needed, "go to the mat" for you.

5. Determine which loan program is best for you. As an example, do not pay for 30 years of expensive rate protection (what the 30 year fixed rate loan does) if you are only going to be in your home for 6 or 7 years.

6. Beware of "Zero Point" or "Zero Cost" loans. They are sucker loans. Nothing is free!

7. Your lender is legally obligated to send you the RESPA and Good Faith Estimate of Closing Costs within 3 days of application. Insist on this! Read them and ask questions until you understand them. While this disclosure is not binding on the lender, it will show the costs and fees on the program on the date you applied, a good starting point.

8. You need to find out your lender's lock policy. They probably won't lock until you tell them to. The market can change rapidly so developing an executing a good lock-in strategy is very important.

9. Make sure that if the market improves while your loan is in process, your lender passes 100% of the benefit of the improvement in rates to you.

10. Refinancing -- obtaining a new mortgage to replace an existing one -- can save you big money, but not in the way you think. Do not go back to another 30 year loan even though the payment is lower because you can actually end up paying more. Keep the same payment you now have and it will reduce the term of the loan, saving you tons of money.