Common Mistakes to Avoid When It Comes to Mortgage Rates
A Home Buying Article Contributed by Robert Scalia
Why Mortgage Rates are Not the Be All- End All When It Comes to Buying a Home.
It's easy to see why people can get sucked into a particular company or lender advertising the lowest possible mortgage rate.
But before you go and commit yourself to the lowest mortgage rate but there and possibly sign your life away, here's a couple of tips that will ensure you don't end up getting the shorter end of the deal.
Some of the More Common Mistakes to Avoid When It Comes to Mortgage Rates
One of the most common mistales when it comes to mortgage rates is choosing a lender just because they have the lowest mortgage rate out there instead of getting a written good-faith estimate.
While the mortgage rate is important, you also have to look at the bigger picture and examine the overall cost of your loan. This means looking at the APR, the loan fees, and both the discount and origination points. Some lenders add these origination points into their quoted points, others will add these points in addition to their quoted points.
So keep in mind that while one lender may say two points and mean two points, another lender a phone call away may say two points but in effect mean 2 points plus 1 origination point.
The main point to keep in mind here is that the cost of the mortgage should never be your only criterion. And remember, there is no substitute for asking family and friends for referrals and making sure you exhaust all your possibilities when it comes to interviewing prospective mortgage companies.
It's important that you can rest assured that the loan officer you are dealing with is committed to your best interests, not his or her own,and will stick with their promises. When things sound to good to be true, they usually are.
That means the company that has the absolute lowest quoted mortgage rate advertised on television in the newspaper may not be the best company for you or your mortgage.
Does This Mean You Should Discount Mortgage Rates Altogether?
No, this doesn't mean this at all.
Most mortgage planners out there understand that mortgage rates are really important indicators of whether you are getting a deal or not. The best thing to do is to shop around for your loan and consult with at least 3 mortgage companies before you make a decision.
Needless to say, there are countless stories out there of consumers who wound up paying higher rates or getting the wrong loan program for them because they followed the advice of a commercial or their realtor.
And, perhaps just as important, always make sure you get the rate lock for your loan in writing. When a mortgage company tells you they have locked your rate, you need to get a written statement detailing the exact interest rate, the length of the rate lock, and details about the overall program. Simply going on a killer deal mortgage rate just isn't good enough.
