24 responses

  1. Roshawn @ Watson Inc
    November 14, 2011

    You offer some great tips regarding investigating the mortgage process. As you mentioned in the beginning: this is among the largest (and preferably the only) loans most people will obtain. It pays significantly to be judicious in the process.

    • MoneyCone
      November 18, 2011

      The task is daunting, but ignorance can be very costly.

  2. Miss T @ Prairie EcoThrifter
    November 14, 2011

    These are great. We found shopping around to work really well. We used a broker and got ourselves a really good plan. We are able to double up on payments and pay back and additional 10% a year. We also got a really nice and low interest rate.

    • moneycone
      November 18, 2011

      Shopping around is so important! It is amazing how much different the rates are from one lender to another!

  3. Hunter – Financially Consumed
    November 14, 2011

    Being aware of how expensive your mortgage is, is not as simple as it sounds. There are many moving parts. I would suggest being aware of all of the items you mention above,as well as the sum total fees and charges on top of the amount of the purchase. This is wrapped into the APR, but it’s useful to see this expressed as a dollar amount. This helps when comparing the cost of loans from different lenders.

    • moneycone
      November 18, 2011

      Well put Hunter! Ultimately what matters is how much you’ll have to fork out month after month! Rates can be confusing as hell!

  4. krantcents
    November 14, 2011

    Do your research upfront is very important and making sure that you receive what you were promised is equally important. I would add to negotiate on all of your closing costs. Believe it or not they are negotiable.

    • moneycone
      November 18, 2011

      Good advice for first time home buyer, KC!

  5. Untemplater
    November 15, 2011

    I really need to get an updated credit report. I’ve had it on my to do list for longer than I want to admit. I do monitor my bank accounts actively at least. Research and thoroughness really is vital with mortgages! -Sydney

    • moneycone
      November 18, 2011

      Do it! Takes less than 5 minutes! :)

  6. DIY Investor
    November 15, 2011

    I second Krantcents. Get what is promised. When we closed we were told there would be three bushes in the front yard. There were two. The agent gave a puppy dog look and asked whether we wanted her to buy a bush. We said we didn’t care where it came from but somebody would have to put up the money before we signed.
    In my experience they are experts at nickle and dimeing you at closing because they know you want the house.
    If people would have understood their mortgages there would not have been a housing crisis. They took ARMs and were told if they couldn’t make the payments when the adjustment came they could just refinance because home prices always go up. We still have a few more years to go to work out of this mess.
    As usual a very informative and useful post.

    • moneycone
      November 18, 2011

      Excellent point DIY! If people really understood what they were getting into as opposed to going by what the real estate said, we wouldn’t have this crisis in the first place.

      ARMs are not for everyone and the surprise at the end can be quite nasty.

  7. Suba
    November 15, 2011

    As a first time home buyer (in the next year or two), these posts are really useful. So I have nothing to add contentwise, but can I suggest a design addition. This is the 4th post I am bookmarking on this (home buying) topic from you blog. I know you have tags, but it will only let me find more about mortgages and loans, can you add a “home buying” or something that collects a series of posts on a very useful topic? It might be useful to other too. Esp. as your related post shows only mortgage/credit card posts. Just a thought…

    • moneycone
      November 18, 2011

      Thanks for the feedback Suba! I’m thinking of upgrading to a different blog theme soon. I’ll do this along with that overhaul.

      Much appreciated!

  8. Darwin’s Money
    November 15, 2011

    I came to an interesting conclusion recently on a refi. Even though the spread to the new rate was pretty good, switching to a 15yr from my 30 at the higher rate didn’t make sense for me from an NPV standpoint. The closing costs were too damn high! A good thing to compare is how you’d fare if you just took the closing costs and pre-paid that amount into your current mortgage – to see if you’d fare just as well (while hanging on to that cash!).

    • moneycone
      November 18, 2011

      We both think alike Darwin! The other day I was thinking the exact same thing when I was trying to refinance and one lender mentioned closing fees!

  9. Christa
    November 17, 2011

    Great tips, especially about PMI and points!

    • moneycone
      November 18, 2011

      When I started out, those were the most confusing for me as well!

  10. Buck Inspire
    November 18, 2011

    Are you in the mortgage industry? Thanks for the detailed breakdown. Hope I can take advantage of these low interest rates. One day I’ll make sure to bring your How To posts! :)

    • moneycone
      November 18, 2011

      Mortgage industry? If that were the case, I would either be at the top 1% or the bottom 1% depending upon what role I played! :)

      No Buck, just a recent home buyer who went through the pains of making sense of getting a mortgage!

  11. Kris @ Everyday Tips
    November 18, 2011

    Yikes, I didn’t know that some ING Direct mortgages had prepayment penalties- I just refinanced with them. (However, we did clarify there was no prepayment penalty, but it still made my heart skip a beat when I read it.)

    Great post, as always!

    • moneycone
      November 18, 2011

      When I was shopping around, I specifically asked and the rep mentioned that for that loan, there would be a pre-payment penalty.

      That took me by surprise and thought I should mention it. Always ask!

  12. World of Finance
    November 19, 2011

    Fascinating… mortgage means death pledge lol…. they usually say that you are signing your life away as you sign the closing documents; guess this is how you define mortgage ;)

  13. Kevin @ Debteye
    December 3, 2011

    I used to be a mortgage banker and everything you mentioned are great tips. Most states banned prepayment penalties.

    When shopping around for a mortgage, compare the interest rate you’re getting and the origination fee. You can get a feel for what the “par” interest rate is. You can try to negotiate on the origination if you bring a GFE from other lenders.

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