Houston, Texas, June 21, 2022 (GLOBE NEWSWIRE) — Finding the best mortgage loan can be tough and obtaining your loan terms without giving away your personal information can seem impossible. You’re probably wondering: Is there a way for me to find out my interest rate and closing costs without needing a hard inquiry on my credit report or providing sensitive documents?
When you call a bank or mortgage lender, they often want to immediately pull your credit with a hard inquiry and request that you give over your personal information and documents before they will answer your questions about interest rates and/or terms. This means shopping for loan terms can entail providing those personal documents and information to multiple companies increasing the chance that they end up in the wrong hands, and with identity theft at an all time high, no one wants that.
So, the big question you need to ask is this: Is there a way for me to secure loan terms without disclosing my personal information?
Securing Loan Terms: What You Need to Know
The best answer we can give you for the question above: yes and no!
“Each bank, lender, credit union, or mortgage company will have its own set of rules for providing loan terms. The best way to obtain loan terms is to be proactive about providing your information in advance and leading the charge from the beginning,” says Blink Lending & Investments Founder Paul Lamnatos.
It is important to note that “providing terms” is not the same as qualifying for a loan, so here is a quick rundown of the information you should provide your mortgage company.
Type of Transaction
“The first thing that most mortgage companies want to know is the type of loan you are wanting,” says Paul Lamnatos, Founder and Chief Lending Concierge at Blink Lending & Investments.
● Is it for a Home Purchase Loan?
● Is it a No Cash-Out Refinance Loan? In this transaction, you will refinance your home for the same amount or a smaller amount than what is currently owed on your principal balance.
● Is it a Cash-Out Refinance Loan? In this case, you would refinance and add to your overall principal loan balance by receiving or taking Cash Out of your home’s equity.
“Interest rates have always been lower for personal homes than investment homes and you can expect your interest rate to be about .50% – 1.00%-ish higher when buying investment homes,” says Paul Lamnatos.
● Is this for a home you will live in? It is often easier to secure a loan for a property you occupy than the one you are investing in. This leads us to the next question…
● Is it an investment property? You may need to provide more information to secure a loan for an investment property.
“The length of your loan term also impacts your interest rate as the lower the loan term, the lower the interest rate and vice versa, meaning 15 year loan terms have lower interest rates than 30 year loan terms,” says Lamnatos.
● Do you prefer a 10, 15, 20, or 30 year loan term? This will be the duration of the loan, and you have that amount of time to pay it off.
● Will that be a fixed interest rate or an adjustable (interest) rate mortgage (ARM)? Fixed Interest rates offer more security and are historically .25% – .50% higher than adjustable rate mortgages. So if you don’t plan on living in the house for more than 5 years, an ARM is a great option to consider,” says Lamnatos
“As it turns out none of us are immune from needing to share our credit score in order to obtain accurate loan terms but that does not mean your credit needs to be pulled and/or that a hard credit inquiry is necessary,” says Lamnatos.
● What is your current credit score? This helps the mortgage company decide if you will be a safe person to lend money to and the higher your Credit Score, the better your interest rate.
● Where was that score obtained? There are many different avenues for checking credit scores, so it’s important you get your information from a reputable source.
Equity is a valuable asset, and it is the final bit of information that mortgage companies will need to provide you with loan terms.
● If you are purchasing…
– What is the purchase price?
– What is the amount of down payment as a percentage?
“Keep in mind that loan terms are always based on risk, and a great way to lower your risk (and loan terms) is to reduce your loan amount with a higher down payment. The higher the down payment, the lower the risk and the lower the risk, the lower your mortgage interest rates are,” says Lamnatos
● If refinancing, either with or without Cash-Out…
– How much is the current loan balance? The current loan balance will be the amount of your loan that you have left to pay.
– What is the current market or appraised value of the home? The market or appraised value of your home helps the mortgage company determine the terms of your loan by giving them an idea of your property’s value, thus allowing them to determine your Loan To Value.
Once you have gathered all of this information, the next thing you need to do is call your selected mortgage lenders. Make sure to ask to speak with a Senior Loan Officer, as this will increase your chance of working with someone who is more experienced and knowledgeable. With that said, “As my Daddy always says, just because you have done something a long time, it doesn’t make you good at it,” says Lamnatos.
What to Say on the Phone With a Senior Loan Officer
Don’t worry about freezing when it comes time to secure a loan – this example script will help you know what to say. Just choose the best options for you from the information above.
Hello, my name is _______ and I would like to know what interest rates and total lender fees you offer for someone who is buying a home…
a) To live in
b) For a 30 year fixed interest rate
c) With a 765 credit score that was recently obtained from Credit Karma
d) With a purchase price of $450,000 and 10% down.
If you are refinancing, say…
Hello, my name is _______ and I would like to know what interest rates and total lender fees you offer for someone who is refinancing
a) the home they live in
b) For a 15 year fixed interest rate
c) With a 710 credit score that was recently obtained from my ______ credit card company
d) With a current loan balance of $245,000 and a market (appraised) value of $360,000.
Fill in the lettered slots with your own unique information, and you should have everything you need!
If you have any lending questions for a new home or investment property, we invite you to think Blink. Each home buyer has different needs and wants, and as Lending Concierges (our fancy term for Mortgage Loan Officers) we are both happy and excited about the possibility of answering your questions and exploring your home loan options whether you work with us or not.
Blink Lending – NMLS 1795324
Paul Lamnatos – NMLS 332922
Blink Lending is an Equal Housing/Equal Opportunity Lender.