Truth in Lending (TIL)

San Diego MortgageSan Diego Mortgage | How to Shop-Around

The Truth-in-Lending disclosure or (TIL) is often thought to be the most important document needed to easily “Shop” for a mortgage in San Diego. If used properly, You can readily determine WHO to use for the financing of Your home.

When shopping for a Mortgage in San Diego, make sure You make an apples-to-apples comparison.  In other words, don’t take one Lender’s offer over the phone, another from email, then another by TIL.  That’s a sure-fire way to make the wrong decision.  If You are going to use the TIL disclosure AT ALL, make sure You use it across-the-board on all offers You receive.  If a Loan Officer doesn’t know what a TIL is or says they can’t provide it to You for any reason, run away like the building is on Fire and never look back.

There are 5 items to consider on a TIL disclosure: Annual Percentage Rate, Finance Charge, Amount Financed, Total of Payments, and Total Sale Price.  Once You have the TIL’s from each Lender, these are the things to consider: (Reference the image below)

San Diego Mortgage TIL

#1 –  Make sure that each Offer is using the same static data:
Purchase price, down payment information, escrow information, and closing cost estimations for the unavoidable “hard fees” like Title Insurance, etc. should be the same on each form.  If ANY of the offers has different figures for any of these variables, then everything could be thrown off.

#2 –  The Annual Percentage Rate (APR) is supposed to be the “holy grail” for determining which offer is best.  However, when it gets down to very small figures, like an APR of 4.699% vs. 4.715%, You might have other factors to weigh-in.  The APR is a calculation of how much interest You are paying on an annual basis, including all fees that might be a part of getting the loan.  The idea is, if a Bad Company is hiding a Fee somewhere, they won’t be able to hide it in the APR.

#3 –  The Finance Charge is simply the amount of money it’s costs You to get the Loan.  This doesn’t have anything to do with the interest You’ll be paying, just the fees associated with making the loan happen.  The smaller this number is, the better.

#4 – The Amount Financed is just that, all the money You will be financing with this Transaction.  On a Home Purchase in San Diego, there won’t be much to see here, but on a Refinance the numbers here could vary indicating You need to take a closer look.

#5 – The Total of Payments is typically what makes Your jaw drop.  This is how much You will pay, principle and interest, to own Your home.  This assumes You will only make the required payments and have no additional principle payments, so keep that in mind.  It doesn’t have to be as bad as it looks if You send a couple hundred bucks extra each month toward the payment.

#6 – The Total Sale Price will tell You, as a WHOLE, how much the Property will cost including all fees, finance charges, down payments and anything else included.  Some will say You only need look at this figure and the APR to find the best offer, but that’s not always true.

After looking over Your TIL, trust Your Gut.  If You have two offers that are very close, go with the Person You trust the most.  It would be a mistake to hire someone to help with Your biggest investment if You didn’t feel 100% comfortable with them on a personal level.

Remember, it NEVER hurts to ask!  The smartest thing You can do is decide WHO You want to work with, then ask that Person to MATCH Your best offer.  In almost every single case, they will do it!  We call it having Your cake and eating it too 🙂  The best way to save money and have the best service when shopping for a San Diego Mortgage.  Email me below if You need anything.  I’m here to help.

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