Even if you meet all FHA loan requirements, you need to shop, compare and negotiate terms with different lenders in order to get the best loan terms. Infact, shopping, comparing and negotiating are the only ways to get the best loan. Therefore, if you meet all the requirements of FHA loan, you should follow the below given steps in order to shop, compare and negotiate the best loan terms.

Collect information from multiple lenders/brokers:

A mortgage is a product, like a car or a TV; therefore its price and features/terms may vary from lender to lender. Consequently, different lenders may offer you different cost and terms. Therefore, you should collect information from several lenders, so that you can choose the best price. Also, collect information from different types of lending institutions such as banks, housing finance institutions, credit unions etc.

Moreover, you can also get a mortgage through mortgage broker. The advantage of dealing with a broker is that a broker is always associated with multiple lenders therefore; any broker can offer you wider choice of loan products and terms. However, this is not necessary and a broker may offer you products of only one lender. The disadvantage of dealing with a broker is that the commission given to brokers, in addition to lenders origination fees that may increase your cost.

Find out complete cost information:

Simply knowing the amount of monthly mortgage payment or rate of interest to be charged and meeting all FHA loan requirements will not help you in choosing the best term. Try to find all costs associated with the loan, even the hidden cost. Also, remember your objective is to compare the terms of different lenders. Therefore you should collect information from different lenders/brokers on the basis of same information i.e. you should ask for information about the same amount of loan, type of loan, duration of loan etc so that you can compare terms of different lenders. Infact, you should ask for information on all items mentioned in the below given list.

Compare terms of different lenders/brokers and choose few best terms:

Once you collect all information from different lenders/brokers, you can very easily shortlist the offers that suits to your individual needs. This can also be done on the basis of the amount of downpayment that you intend to make, the monthly amount that you can pay comfortable as mortgage payment, payment duration etc.

Negotiate the Best Deal:

Remember that the offers of lenders/brokers keep on changing even if it is for the same loan amount to different people on the same day. Similarly, any terms offered to you on a given day may differ from terms offered to you on some other day, even if it is for the same loan amount and repayment duration. Therefore, there may be further scope of negotiation in order to get competitive rates.

Also, after comparing and choosing few of the best offers, you know what each lender has to offer. Now your job is to negotiate with each lender for a better deal than the deal offered to you earlier. You can also negotiate with a particular lender for a better deal than the one you can get from another lender.

Once, you have successfully negotiated the best term with a lender; get a written lock-in from the lender/broker. This lock-in should clearly mention the entire rates agreed upon, the period for which the lock-in is active and the number of points to be paid. You may have to pay certain fees such as a lock-in charge, which may be refundable at closing. The lock-in protects you from any increase in rate of interest during your application process.

Therefore, to conclude, simply meeting all FHA loan requirements is not the end, if you want to get the best deal, you have to shop around, compare and negotiate. Infact, to get the best deal, you should use the steps that usually take while purchasing any household, consumer or related product i.e. Shopping, Comparing and Negotiating.

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