Comparing Mortgage Rates and Mortgage Lenders
Where comparing mortgage rates be sure to obtain rate information from several different lenders offering home loans in your state. Many different types of financial institutions including thrift institutions,commercial banks, mortgage companies and credit unions all offer mortgage loans and the corresponding mortgage rates differ as well.
Different home lenders may quote you different rates for the same type of mortgage so you should contact as many lenders as you can to secure the best mortgage rate. This process is a lot easier now that most institutions offer their mortgage rates and refinance rates online. Another option is to use a mortgage broker and have a broker find you the lowest mortgage rates. A broker can also help guide you though the entire process, though by using a mortgage broker you will pay a fee to this person which can run into a few thousands of dollars.
Brokers arrange mortgage transactions rather than lending money directly, they find a lender for you. There are some advantages to using a broker since they have access to mortgage rates and refinance rates from several lenders they also have a wider selection of loan products and terms from which you can choose.
Regardless if you use or don't use a broker you should know the following terms when getting a mortgage. First and foremost ask about the mortgage loan’s annual percentage rate (APR). The APR takes into account not only the mortgage interest rate but also points, broker fees, and certain other credit charges that you may be required to pay. All this is rolled up into the APR as a yearly rate. The mortgage APR will probably be higher than the mortgage rate.
What are points? Points are fees paid to the lender or broker for the loan and are often linked to the interest rate. The more points you pay the lower the mortgage rate will be. Right now 30 year mortgage rates are at 4.00% but you can get 30 year rates as low as 3.50% if you're willing to pay points up front at closing. A point is equal to 1% of the loan, so you can figure out how much money points will cost you or you can ask for points to be quoted to you as a dollar amount.
When you close on a home loan there are closing costs which are monies that need to be paid by you. A home loan has many fees like loan origination or underwriting fees, broker fees, and transaction costs. Every single lender or broker should be able to give you an estimate of its fees. Many of these fees are negotiable, you can ask for lower rates, or at least compare what closing costs are for a similar loan from many different lenders.
Good luck with your serach for current mortgage rates. In fact, you can start your search right here at ratesorama.com.
RatesORama.com Average Mortgage Rates