Loan Shopping? Lower your Closing Costs!
Hope you are having a great week! I just returned from Maui and am getting ready to get back into the swing of things. Im feeling a little under the weather so Im taking a day or two before I dive back in!
However, I read a couple great articles recently and I thought I would share them with you. They both talk about closing costs and how to negotiate them. I know the mortgage shopping process can be a bear sometimes and believe me…I can relate to all of the issues and how difficult it is to compare loan programs, who has what on what day and if they still have that particular loan program or not, who can do refi-cashout loans, stated, non owner occupied loans, etc… Every lender is so different and there is no black and white or one size fits all cookie cutter approach! Thats where our work is cut out for us as investors! I spend a great deal of my time on this each and every week!
Each lender has so many different loan programs and some are charging one point, two points, no fees or too many junk fees. The more lenders you call, the more confusing it can sometimes be-especially for investor loans!
Before you start shopping for a mortgage for your next property, first do some research on what is going on in the current mortgage market. Be a savvy and astute investor! Make sure you know what the different types of fees are, what sort of taxes are required at closing in the area you are investing in, and the basic mortgage “lingo”. This way when you call a lender or go to your local bank, mortgage broker or a portfolio lender, you will know what you are looking at when they give you all of the details which will hopefully make it all a wee bit less confusing. Your Real Estate Agent or mortgage broker can sometimes be a good soure of information as well.
One other thing to think about before mortgage shopping is to think about your exit strategy for the property. How long do you intend to own it? Are you buying and holding? Buying and Flipping? Hoping to wholesale it? Always start with the end in mind and work backwards. If you are planning on holding the property for a while, then it may be worth it to pay a bit more upfront to lower your interest rate by buying points. If you think you are going to want to refinance or sell the property in the next couple of years, then the lower the out of pocket expenses, the better, obviously.
Here are a couple great articles I recently came across that talk about cutting your loan closing costs on your next purchase. I hope you find them helpful!
To your Success!
Charrissa Cawley
http://money.cnn.com/2004/03/22/pf/yourhome/closingcosts/index.htm
http://www.smartmoney.com/home/buying/index.cfm?story=closing
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