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5 Tips on How to Talk to Your Lender

A home purchase is never an easy thing.  The paperwork involved can be awful, and unless you're a finance professional, you may be unsure about mortgage rates or where the housing industry is headed.  If you've done solid research and picked a good mortgage lender, however, you have someone on your side you can go to with questions about your loan.

Don't be afraid to talk to your lender and ask questions.  The following tips will help you communicate better with your lender in order to secure the mortgage loan that meets your needs.

1.  Stay in touch.  The first principle of good communication is "Communicate."  Throughout the entire home purchase process, keep your lender updated on any events that may change your plans or housing circumstances.  Your mortgage will need to reflect these adjustments, and your lender will need to know what's up.  Stay in touch.

2.  Negotiate.  Lenders want your business.  If you have a good credit score and you're a healthy risk, you will likely be able to work out a better deal with your lender, one that meets your needs more fully.  Don't settle for a standardized option.  Negotiate with your lender to create the loan package that's right for you.

3.  Ask questions.  Don't get into something you don't understand.  If you're ever unsure about some aspect of your loan, just ask your lender.  There are no stupid questions when your house and your finances are on the line.  Do you understand the different requirements between a conventional fixed rate mortgage and an insured FHA home loan?  Do you understand the difference between recourse and nonrecourse loans?  Ask your lender to explain anything you don't understand.

4.  Educate yourself.  You'll be able to talk to your lender much more effectively and efficiently if you perform some of your own research and familiarized yourself with the terms and the processes involved in the mortgage industry.  While you're educating yourself, take some time to compare the options that various lenders offer.  Compare mortgage rates, loan terms, and closing costs.  Education and knowledge of the local industry are key.

5.  Be honest, always.  Your lender wants to provide you with a loan.  You want to get the best loan you can.  In order to accomplish this, you'll need to provide all the information your lender asks for, and you'll need to provide it swiftly and honestly.  Don't fudge numbers or leave out important details.  Be honest.  This is the most important tip for effective communication.

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