What you know can save you big on mortgages

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A home is typically the largest investment you’re ever going to have, and obtaining a mortgage can be a daunting and intimidating task.

Before making any decisions on which lender or loan program to pursue, it’s a good idea to become informed about some of the basics of lending. Doing so could save you thousands of dollars, while widespread misconceptions can cost you thousands.

These columns will focus on little-known secrets you can use to design the perfect mortgage for your needs, not the bank’s needs.

Secret 1: No-cost loans.

There are a number of services that must be performed for your home to close, such as writing title insurance, escrow services, appraisal, lender underwriting and processing services, among others. And, of course, there is a fee required for each.

These services and their associated costs are normal and customary. However, it’s not necessarily required that you pay all of them.

If you choose not to ask the seller or builder to pay some costs on your behalf, in most cases you can choose an interest rate on your loan that will cover all of your closing costs.

What’s more, you may even be able to include any taxes and insurance due at closing in this manner.

Be sure to discuss no-cost loans with your lender to see if this is a sound financial strategy for your needs.

Next month, we’ll delve into how your credit score can save, or cost, you money — and what to do about it.

Gabe Terreson is a 17-year industry veteran who regularly conducts workshops and seminars for mortgage consumers and real estate brokers. He is branch manager of Home Team Funding, a division of Pinnacle Capital Mortgage Corp. and can be reached at 360-993-5800, team@hometeamfunding.com or at www.hometeamfunding.com.

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