Mortgages

How to find a Good Mortgage

It is always a good idea to compare rates from several  different companies. But there are several factors to keep in mind. The lowest rate isn't always the best deal. 

Other factors to consider are "points" and "closing costs". 

Points are simply additional finance charges tacked on to the beginning of a loan. They can be paid up front or spread out over the life of the loan. Although adding them into the loan makes your up front costs lower, it greatly increases your total cost since in effect you are paying interest on interest.

Closing Costs are additional fees and expenses necessary in order to transfer ownership of a property. Some examples of typical closing costs are title insurance, title searches, court filing fees, and survey charges. Sometimes closing costs are called settlement costs. These fees are not the same with every lender so be sure to include them in your comparison.

Another factor in the rate that you will be offered is your credit rating. Someone with a good credit rating provides a much lower risk to the lender so they will be able to offer you a lower rate.  Some lenders specialize in one type of borrower over another.  In other words some lenders prefer higher risk with higher returns while some prefer lower risk borrowers.  So if you ask the wrong type of lender either they will turn you down (in the case of a high risk borrower approaching a low risk lender) or their lowest rate  will be higher than you could get elsewhere, (in the case of a low risk borrower approaching a high risk lender). Of course some lenders are willing to loan to either type of borrower and just offer them different rates.