Finding the best mortgage available on the market does not have to be difficult. Follow these simple steps to get the best loan available for you.
1) Get the point
If the initial interest rate and payment quote was issued with 0 points, take a moment to view your interest rate buy down options. If you plan on keeping the loan for more than 3 years, it may make sense to pay points to buy down your interest rate. You may find that the lower rate and payment may make the points worthwhile.
2) Break even
Once you have selected an interest rate buy down option, simply divide the total dollar amount of points you will pay by the dollar amount you will save in monthly payments. This will tell you how long it will take for you to break even. For example, $1,500 in points divided by monthly savings of $50 equals a break even timeframe of 30 months. Once you break even, you will have recovered all of the points you paid up front and will then begin saving money every single month from that point on.
3) What you don't know may hurt you
If the rate quote you are receiving from a mortgage company seems too good to be true, it probably isn't. Check for hidden fees or charges that make the lower quoted rate more expensive in the long run.
4) Have faith
You have a legal right to a good faith estimate from any mortgage company that issues an interest rate quote. Request a copy of this document and review it carefully. Everything you need to know to make an apples to apples comparison of loans is contained within the good faith estimate.
5) Do your homework
Don't just assume you are dealing with a reputable company because they have a website, check them out. There are two excellent resources for verifying the integrity of any mortgage company: The Better Business Bureau and The Department of Real Estate. These independent third party resources can verify the integrity, reputation and licensing status of any mortgage company to ensure you are only working with the someone who deserves your business.
If you follow these simple tips you will have the confidence of knowing you are getting the best loan program at the lowest interest rate with the right costs from a reliable company.