I have many friends that shop online and go to dozens of different sites in order to save a few bucks on books, tv’s, appliances, etc. Is this a good idea? It definitely is if the savings are worth it and you don’t mind taking the time out of your busy day to do all the research.
What about buying a home and getting a mortgage? This is one clear-cut example of why you absolutely need to spend time and do your homework when getting a mortgage. Yes, getting an excellent rate is one part of it, but there are costs that can surface down the road without you even thinking of it now which can cost you a lot more than you think (I’m talking about mortgage penalties).
Lucky for the consumer, I do this work for you. I have access to dozens of financial institutions, corresponding to hundreds of mortgage products. I am a one-stop-shop.
On the other hand, many clients do choose to consult their bank first; that’s ok! However, if you do go to your bank, it’s best to be armed with the right questions:
-ask the bank representative how many mortgage clients they’ve had and how long they’ve been in the banking industry.
-ask them if they plan on being in that same position for a while or if they’re working on a promotion (or even leaving the industry). This is important so that you know if the person will still be there once you find your place and if they’ll be around in the future if you have any questions. I used to work at a bank and that was the number one complaint from clients (that bank representatives are always moving around). It’s not their fault. They just want to get promoted and keep moving up the ranks.
-ask them how they register their mortgage (collateral vs standard charge) and what the differences are of each
-most of us want to pay down our mortgages faster, so ask them about pre-payment privileges and how they work
-ask them about the different types of mortgage terms and rates
-most importantly, ask how prepayment penalties are calculated and ask them to give you an example. This is important as down the road you may have to get out of your mortgage before the maturity date
After you visit your bank, come and talk to me and ask me the same questions.
Once you spend the 2 or so hours (an hour at your bank and an hour with me), you would have covered 230+ lending institutions.
In my opinion, spending the 2 hours can potentially save you many headaches and thousands of dollars down the road.