The Lending Coach

Coaching and teaching - many through the mortgage process and others on the field

Tips on Interest Rates and Mortgage Shopping

During the home buying process, one key component for borrower consideration is the mortgage interest rate. As many know, rates vary widely from lender to lender.

You might wonder if the lowest rate is the best way to go…but please know there are other factors to take into consideration besides an advertised rate.

With that in mind, here’s a list of tips to help give the buyer confidence as they enter down the path of home ownership or refinancing a current home loan. The single best thing a potential borrower should do is to reach out to a trustworthy mortgage lender!

Do Your Research as You Compare Lenders

Be wary of rates that seem too good to be true. If a rate is far lower than most others, there may be significant extra costs involved – remember, there’s no such thing as a free lunch!

Be skeptical of lenders that have little to no reputation. Check the web for testimonials, run some Google searches and find out mor about them and the firms they work with. Consider how many years the lender has been in business and any complaints or bad reviews online.

If your lender can’t provide you with a solid list of references and referrals, they might not be the right one for you!

Education is Key: Learn About Loans and Rates in Order to Compare Them

It’s important that buyers decide what their goals are regarding that home purchase and whether you need a fixed or adjustable interest rate. A fixed interest rate means that the rate stays the same throughout the life of the loan. An adjustable rate starts off lower and then increases gradually, usually annually, but not beyond a maximum amount.

Talk to trusted industry experts, then with family or friends about what types of home loans they have had and what their experiences were with each type of loan and lender to get a better idea of what might work well for your situation.

Look Beyond the Actual Percentage Rate

Learn about the Annual Percentage Rate (APR) and points. The APR is the cost of credit, expressed as a yearly rate including interest, mortgage insurance, and loan origination fees.

With that said, the APR isn’t necessarily the best benchmark to utilize – find out more about that here….there really are other factors that weigh into this equation.

It’s important to know whether points are included with the APR as it will affect your costs of the loan. A rate may be lower, but may include points, which you will pay for and should account for when comparing home loan interest rates.

Look into other fees that are included with the loan. These might include Lender Fees, Appraisal Fee, and Title Services Fee to name a few.

In Conclusion

Taking the extra step to educate yourself on interest rates and your potential lender will really help you gain a better understanding of the process and options available.

I would be happy to give you the tools and information you need to make wise choices during your home buying journey. Got questions?  Don’t hesitate to reach out to me, as I’d be happy to answer any questions as you might have!

2 Comments

  1. Tom,

    I really like your concept. It is personal and refreshing. It fits you and it fits your product. The next buyers that come my way that don’t already have their financing lined up will be sent your way.

    All the best in 2018,

    Bill Lindner

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