how do I know if a mortgage loan offered to me is fair why buying a home?

Answer 1

compare apples to apples. get quotes from other banks with the same specs of your loan. make sure you take fees, points and interest rates, and closing costs into consideration.

what's good deal to you might not be a good deal to someone with a higher credit rating. it really depends on your credit rating and your income.

Answer 2

The best way to know is to shop around at different mortgage company's. Every company is different in the type of loans that they can offer you. Some mortgage company's are able to pre-approve you with 24 hours. I got 4 different quotes from different mortgage company's. What surprised me was how different the down payment costs and closing costs were from loan to loan. My realtor recommended that I get at least 3 quotes. Good Luck & God Bless

Answer 3

Take into account the rate he offered you and the amount you are borrowing. Usually, the more you borrow, the lower your rate will be. Also, if you have a credit score over 600, you should be getting a good rate.

Check on-line and see the current rates other companies are offering. If you have poor credit, they will add on a few points to your rate.

Don't ever fall for getting an interest only mortgage. You'll never gain any equity in your house!

Answer 4

ask yourself this. was this from a lender or a broker? we'll get to that in a minute. but, first, pull a copy of your own credit report. since you're in the market for a home, having dozens of brokers/lenders checking your credit within a small time frame will not do your score any good. if you have your own copy of your credit report. you can simply tell the loan officer your middle score, then they can get you prequalified for a loan based on that info. or you can fax your report to them so they can view and and obtain the necessary info from it. this is a simple way to shop around without getting hammered for having your credit viewed so many times.
whenever you check your credit, that is considered a soft hit, meaning no degradation in your points, so long as it's not done too often. whenever someone like a dealership or mortgage company checks your credit, that's a hard hit, whicih will reduce your score. too many hard hits and your score will drop significantly.
GFE's (good faith estimates) are a good place to start to see what they will charge you for the loan itself. many places can charge monsterous fees that you are unaware of. with the GFE in hand you can compare who's fees are more acceptable to you and go from there. your rate is entirely determined by your credit so the better your credit, better your rate. crappy credit leads to horrible rates. mid score around 650-680 will generally qualify one for 100% loan amount. anything lower and a deposit is needed anywhere from 3-20% depending on how bad your score is.
with the lender/broker thing mentioned before; the main area of concern for you will be how many points you are charged. anyone with less than perfect credit will get charged points. it's not going to change from one lender to another. you'll still get charged the same amount everytime almost. some states limit how many they can charge, some don't so be weary. brokers are required to show you how many points you are being charged. lenders do not need to and can charge you lots of points without you being aware of it from the get go.

there are front and back end points. back end points will affect your rate. so if you're qualified for a 6.5% rate and they add a point, you now pay 7.5% rate. usually not many people can get away with this as the higher the points assessed, the bigger the rate and that tends to scare lots of people away. the front end points DO NOT affect the rate but will come out of your pocket OR will be tacked onto the loan amount which you will eventually pay off. this is where many brokers/lenders make their money since it's hard to determine which side the points are being charged on.

SO, get a copy of your own credit report, find some reputable lenders/brokers in your area, have them shop your score around, then get GFE's. after all this, sit down and look over all the GFE's and you should be able to find one that ill suit your needs.

Answer 5

Get at least 3 quotes from different lenders and go with the best quote. Banks are good but some mortgage lenders are better.

Answer 6

Compare the "Good Faith Estimate" from a few lenders. The good faith estimate will calculate in the cost of the loan and makes it easier to shop loans.

Answer 7

Check with a number of mortgage brokers.

Answer 8

REad the small print