Californian homeowners pay one of the highest premiums in the country because their state is warm and sunny. The National Association of Realtors says that in the fourth quarter of 2005, the median price of a single-family home in California hit an eye-popping $542,000. Finding the best mortgage loan rate is important no matter where you live, but prices like these show how important it is for people in California to do their mortgage homework.
The Federal Reserve's article "Looking for the Best Mortgage" says that getting a good rate on a mortgage in California is mostly a three-step process. The Fed's plan is called "Shop, Compare, and Negotiate," and it says that a mortgage is basically a product like a car. The price and terms of a home loan are often negotiable, just like the price of a new Caddy. So, the Fed says, it pays to shop around, compare prices, and bargain.
The first step is easier than ever: looking for the best home purchase loan, home equity loan, or refinance loan. That's because there are a lot more online lenders now and more people are using them. Many states, including California, now have a wide range of mortgage products from national lenders like Home 123 or Ameriquest. Online lenders offer mortgage products that are both convenient and flexible. They are also available 24/7 to give you a free mortgage quote, which you can't say about traditional lenders like banks or credit unions.
Shopping around for a mortgage in California is just the beginning. After that, you should look at the different offers you've been given. Make a list of all the important details about rates, points, fees, the down payment, and the cost of private mortgage insurance. Set up the worksheet in an Excel-like spreadsheet programme and give each lender its own column. This makes it easy to compare lenders and costs side by side.
Lastly, the Federal Reserve says that you shouldn't think that a lender's offer is your last chance to find the best California mortgage. This is because mortgage lenders often give different terms and rates to different customers, even if they are all equally qualified for a mortgage loan. It's in your best interest to negotiate, so now is the time to show a potential lender that you're a smart shopper looking for the best deal. Don't be afraid to ask for lower rates, fees, or points.
In conclusion, don't forget to shop around and compare offers when buying a home or negotiating a home equity loan or refinance loan. So, you'll be sure to get the best deal on your California mortgage.
