A little research to compare your options for a mortgage can help you get the best mortgage rate.
Use the power of choice to call two different lenders to apply for a mortgage—they may give you a different interest rate, and you can use this to your advantage. Even though information like your credit score and salary is set, financial institutions can interpret this information differently. And that can mean scoring a lower interest rate merely because of your choice in lender. Many borrowers don’t compare interest rates before selecting their mortgage, which possibly ends up costing them many years of a debt-free life. When you’re comparing lenders, here are a few questions to ask.
Will the size of my down payment impact the interest rate or fees on the loan?
If you put down less than 20 percent when you apply for a mortgage and buy a home, you’ll likely end up having to pay for private mortgage insurance. Be sure to understand the minimum down payment and how it can affect the rest of your fees.
Are points included in the quote?
A quote with an interest rate from your mortgage lender may or may not include points. Points are fees that you can pay to your lender when you decide on a home in exchange for a lower interest rate.
How can I lock the interest rate?
When you get quotes for your interest rate, you need to ask how you can lock that quoted rate. If you wait too long between getting the quote and actually applying for the mortgage, the rate the lender gave you may expire, leading you to pay more in interest down the road. By locking in a rate, you’ll get what you budgeted for and can avoid having to ask for another quote with a potentially higher rate.
There is no such thing as a stupid question, especially when it’s something as important as the mortgage that’ll be with you for years. Contact Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you.