Getting the Best Rate for Your Mortgage
Naturally, you want to get the best deal for the least amount of money. This
holds true for mortgage rates, as well.
A lower interest rate means a lower monthly mortgage payment, which can save you
a lot of money in the long run. Also, it is easier to qualify for a lower payment
than a higher one.
You basically have two routes to finding the best rate. The first is to do all
the research yourself. The second is to use a mortgage broker.
Do-It-Yourself
With the advent of the Internet, much information is readily available.
Once you have educated yourself sufficiently about real estate loans, all it
takes is the time and energy to sift through it to find the information you
need.
Rates change quickly, so that great rate you find today might not be there
tomorrow. Once you find the rate you desire, submit a loan application and lock
in that rate.
When comparing loans, make sure that you're comparing loans of the same type.
For example, you find that "Loan A" for a 30-year loan has a much lower interest
rate than "Loan B" (also for 30 years). Upon further inspection, you find that
"Loan A" is technically an adjustable rate mortgage, one whose payment is based
on a 30-year amortization, but is due through either payment or refinancing at
the end of 5 or 7 years. (You will frequently hear these referred to as a 5-year
or 7-year fixed-rate mortgage.) While both said "30-year", they're not the same
type of loan. For Loan B, the payment is truly fixed for a
30-year term.
Ask the lender for a statement detailing all fees associated with the loan.
Factors such as "points" (loan fee), interest rate and "garbage fees" (extra
fees which some lenders charge) can vary greatly from one lender to another.
Mortgage Broker
If you don't have the time or experience to "do it yourself", look for a
qualified mortgage broker. Ask friends & associates who have refinanced or
purchased recently if they have a broker they can recommend. You want to find a
broker who is energetic, flexible & knowledgeable on finance and loans. You
need someone who has your best interests in mind.
