Things to Understand about Mortgage Quotes
A Home Buying Article Contributed by Elizabeth Fox-Wise
It is Always a Good Idea to Get More Than One Mortgage Quote
Some people think that a mortgage is a mortgage is a mortgage, but this is not true so be sure to get several quotes before choosing one. Mortgage interest rates and mortgage terms can vary considerably from one lender to the next.
When you think of getting a mortgage quote the obvious thing that comes to mind is comparing the mortgage interest rate that the lender is willing to offer in his quote; however there are other things to consider besides just the interest rate.
You want to seek thorough mortgage quotes which also include broker fees, points which must be paid at time of closing (one point is equal to one percent of the amount of the mortgage), prepayment penalties, mortgage terms, application fees, credit report fees, appraisal costs and other fees the lender will charge associated with the mortgage.
Before Pursuing Mortgage Quotes, Do Your Homework
It is always best to have a good idea of the type of mortgage you would like to secure, and then request your mortgage quotes be geared toward that type. For example, do you want to secure a fixed rate mortgage or a variable rate mortgage. You can not compare quotes if one is for a fixed and another is for a variable. How many years do you want to pay the mortgage off?
Once you understand your mortgage options and have an idea of which is best for you, then you should research rates being offered on the mortgage you are interested in. This will help you to have an idea if the mortgage quotes given to you are competitive with the current market or not.
Furthermore, you should have a good understanding of your own financial situation and how large of a mortgage you feel you can comfortably afford.
When You Determine the Best Mortgage Quote, Get a Rate Lock from the Lender
In today's volatile economy with threats of mortgage rates going back up any day, it is crucial to get a rate lock in writing from the lender that you chose to apply for your mortgage. A rate lock in writing will guarantee you that the rate being offered in the mortgage quote will still be available to you by the time the mortgage application process is finished.
You want the rate lock to be set "on application" not "on approval". If it is set on application this guarantees the rate that you are being quoted today. If it is set on approval, the rate could possibly change significantly by the time the application is approved.
Therefore when comparing quotes you also want to compare the length of time offered for rate locks and any fees associated with that process.
The mortgage rate lock needs to be long enough to allow for the application process and settlement as well as any other delays that can occur along the way. Typically a rate lock will range in length of time from fifteen - sixty days. Obviously a sixty day lock is most desirable.
