Always shop around if you want best mortgage deals, even if it’s your friend that’s processing your loan. Nobody will volunteer or just give you cheap mortgages just because they like you. There are many funding choices, banks, mortgage companies, credit union and, thrift lenders. I know what some of you are thinking, why not contact a mortgage broker to obtain best mortgage deals. The simple answers is, he may not have access to the right loan type and will try to push you in the loan that will make him the most money.

Contact more then one mortgage broker for cheap mortgages, apply the same strategy for other funding sources this is very important; it is just like getting a second opinion from a doctor. When you are dealing with large amount of money you don’t want to leave any options open. It amazes me how many people over look this option, I would say that 90 percent of my friends never used a second source on funding loans. We will cover more on what type of relationship you should have with your broker.

Internet is your friend when searching for cheap loans, so use it to your advantage, but be careful and only go with established companies. The great thing about internet lenders or brokers, they have many lending procedures automated and this cuts down on overhead and overall processing cost. This gives them a huge advantage over your regular banks. Internet is a very good choice for cheap mortgages.

OK, we covered the very basics and it was pretty much an over view of what to look for from the beginning to the end, we still have plenty to cover. I think next, we will cover rates, point, fees, down payment, and mortgage insurance. So stay tuned for more cheap mortgages and best mortgage deals tips.

We will start with the interest rate. When you contact the lender about cheap mortgages, ask for the rate and then ask if this is the lowest rate for the week. This sound simple enough but you will be surprised how many potential home buyer don’t even ask this question, the reason could be, they fear rejection and the anxiety of just the whole home buying process.

Points are another term you should sound very familiar. So we will keep this simple. Points is 1 percent of the total loan, so this is where you want to negotiate, many times points have mortgage broker’s fees built in or the mortgage broker is giving you inflated point so he will make more money at closing. So when it comes to getting the best mortgage deals and cheap mortgage, always negotiate points, I can’t stress this enough, most of the time you can take off ½ point just by asking for lower points.

Fees..yes the dreaded fees. These fees will kill any chance you have on obtaining cheap mortgages. This is another money maker for banks, mortgage brokers and even credit unions. Have you ever seen that commercial, when a women talks about different kind of fees she was charged when applying for the loan ?

The lenders will try and stick you with lots of different and ridiculous fees and it’s your job to reduce or eliminate them. Ask for a print out of all the documentation fees, look for fees that don’t make sense like $25 fax fee, $150 transaction fee, $200 administrative fees and my favorite the $300 miscellaneous fees.

Don’t get shy, these people are trying to make as much money as they can, so please ask them to remove the fees and be firm about it. If you want best mortgage deals and cheap mortgages, then start treating the lenders like you would treat used car sales men. If you don’t adapt this way of thinking then it will be much harder to obtain cheap mortgages.

We will start with prepayment penalties. When you are narrowing down your choices of loans make sure you keep an eye out for prepayment penalties. What are the negatives of prepayment penalties?? One major negative is when you try to refinance your loan, now if you have no intention of refinancing your loan then you really don’t have anything to worry about.

Now we will cover the basic negatives of cheap mortgages and Interest Only Loans. Interest only loans are a great idea if you will sell the home in couple of years or sooner, many home flippers would choose this option because it requires less money upfront. Now, interest only is a terrible idea if you plan to keep your house for longer period of time, because you will build no equity and if the market slows down or collapses you will be in deep trouble and will be most likely upside down on your cheap loan thats not very cheap anymore.

Next up is the worst option possible for cheap loans and it should only be used by real estate investors. I’m talking about Negative Amortization Loans, these loans can make you or break you . When making a payment on a conventional loan you’re paying down interest and balance of the loan. The Negative Amortization loan adds to your loan balance while keeping your payments as low as possible. If you want the best mortgage deals, then this should be you last choice. Many borrowers got way over their heads with this type of loan. i would pretty much avoid this loan type and not use it as an option.

The new kid on the block of cheap mortgages tricks is 50 year loan, yes, that’s right 50 years. If you calculate a $500,000 loan and compare payment differences between a 30 year loan and a 50 year loan what do you think it will be?? It will be about $200 dollar difference. You will be better of going with interest only loan, because the payment difference will be the same.

Adjustable Rate Loans—This is the type of interest loan that fluctuates
over a period of time. It should have a min and max rate set.

Fixed Rate Loans— Payments and Interest stays the same thought out the loan.
This type of loan usually comes with 30 years term.

Conventional Loans—Loans that are not guarantee by FHA. As opposed to PMI
loans (FHA Loans).

Escrow—Type of account used during the loan process to hold money or documents,
can also be used for holding reserves such as insurance and taxes.

Loan Origination Fees—These type of fees are usually charged by the lender to start
the loan process. Please not that you can and should negotiate these fees.

Overages—When the broker keeps the different between the actual loan amount
And the amount given to the customer. Basically the broker could have gave you a better
rate but kept the difference for himself.

Points—These are the fees based on the total amount of the mortgage. Each point
equates to 1 percent. Most loans will allow you to add the points fees to the total
balance of the home loan.

Private Mortgage Insurance—This type of insurance will protect the lender against
the borrower defaulting on the loan. Most of the time it’s referred as PMI insurance

We try to explain the terminology in English so you can have a better feel for the
Language used. Please do other research in order to get cheap mortgages online.

We state this in pretty much every post. Do your homework and prepare for a battle
The lenders and mortgage brokers are not on your side, they will try and get every
penny possible. If you haven’t noticed I’m not really fond of them.