When I looked for my first, I was skeptical about rates that were too low. There had to be a catch when one had a rate that was a full percentage point less than another. It turns out there is a catch. Fees can differ by thousands of dollars.
The reason is the annual percentage rate accounts for the fees you're paying to secure the mortgage. This way you can figure out the real price difference between a mortgage with a low interest rate and high fees and a high interest rate and low fees.
So, the real question is: How do you find the lowest rate? Well, there are four sure-fire ways to find out. And here they are...
1. Learn Your
Rates are often broken down by FICO score at MyFICO.com for $20. (To access a free without the score, go to AnnualCreditReport.com.) If you notice an error on your , challenge it. A simple comment that removes a misreported item on your credit report can bump you up a credit category, potentially you thousands on your .groupings. Mortgage shoppers with excellent usually get a better rate than someone with fair . You need to know what you have to in of . You can access your
2. Find Your State's Average Rates
3. Figure Out What You Have ToDown
It doesn't matter if the rate ends up lower when you have to pay more ahead of time for the mortgage. For instance, one lender may offer you a 4% rate, but you have to pay $6,000 in mortgage fees. Another lender may offer you $1,000 in fees with a 5% rate. If you have only $1,500 available to pay fees, don't abandon the 4% idea yet. The lender may roll the fees into the cost of the mortgage. If the APR is lower, you might get a better deal.
4. Find The 5 Best Rates
It doesn't matter whether you find rates from your local bank, the newspaper or online. The lenders don't know they have competition.that causes the most problems for consumers is only talking to one lender, Foster says: "Whether they go to the Internet or newspaper, they absolutely need to talk to more than lender." That gets consumers the best rate, and if they don't like an answer one lender gives, they can ask another company to explain it. Also, deals such as rolling fees into the mortgage might be harder to secure if the
TheAnswer: The best way to find a great deal is compare, compare, compare. When you've settled on a lender, read the document in its entirety and ask any remaining questions. If anything doesn't look right to you and the lender doesn't answer your questions properly, you may want to go with your second choice. Communication with a company you could have a relationship with for up to 30 years can be as important as the rate.