When you are in the market for a new home, good customer service is certainly important. But let’s face it: most people are primarily worried about how much they will have to spend when they buy new homes. The home loan that you choose has a lot to do with that, so it is important to consider several factors when you compare home loans to get the cheapest option.
Compare Interest Rates
Some lenders offer introductory periods with fixed interest rates while other lenders may not. If you want this security, then you need to compare home loans to find the lowest interest rate. You’ll typically get the lowest rate when you choose a loan that has a short fixed rate period. In other words, a one-year period will usually have a lower interest rate than a ten-year period.
If you are looking for a home loan, it is Club Thrifty’s opinion that you should look for a 15-year fixed rate loan with no prepayment penalties. In general, it is our opinion that home loans with adjustable rates are riskier and – thus – not in the borrower’s best interest.
Compare Application and Processing Fees
There’s more to getting a home loan than having a decent credit score and enough money to repay the lender. You will also face numerous fees during the application and acceptance process. This can get complicated, so make sure to request detailed information from every lender. A detailed list of all the fees you will incur should be provided to you prior to your closing on the loan.
At times, these fees can offset any savings that you might get from a lower interest rate. If you don’t compare home loans and their fees, though, you’ll never know whether you’re getting a good deal or paying outrageous prices. While most companies will charge similar fees, you may find a wide range of prices with those fees.
Consider Late and Early Repayment Fees
The vast majority of lenders will charge a late fee when you don’t send in your repayment on time. The fees, however, can differ quite significantly from company to company. Sure, you don’t expect to make late repayments, but ir is always a good idea to find out how much the fee is anyway.
You should also ask about early repayment fees. Some companies charge a fee when clients pay off their home loan balances early. Ideally, you can find a loan without an early repayment fee. If you have to accept one, look for an inexpensive option. Otherwise, the penalty could offset any interest savings that you get from repaying early.
In conclusion, when decide to finance a new home you should always shop around before settling on a lender. Just like in any other field, you may find a significant difference in the price that lenders charge you from company to company. In the end, shopping around before you commit to a home loan could save you thousands of dollars.