(03/05/2010) To get the best deal on a mortgage, it is important to show around and locate the best deal currently offered in your area. The easiest way to do this is to search online. When comparing mortgages, it can become confusing given all the various attributes mortgages can have. Informa Research Services suggests a few tips to help you find the best mortgage online.
Compare the same products
Because rates can vary from product to product, it is important to compare the same products when rate shopping. For instance, what may constitute a competitive rate for a 30 year fixed mortgage may be very different than what is considered low for a 5/1 adjustable rate mortgage (ARM).
Compare rates on the same day
Depending on market conditions, mortgage rates can fluctuate daily and sometimes, even hourly. Use online rate tables to compare multiple rates simultaneously. Because these tables are updated regularly, you can be sure the rates you find are current. Be sure to contact lenders to verify posted rates and to answer any other questions you may have about their loan product.
Compare Annual Percentage Rates (APRs)
Comparing mortgage rates can get confusing, especially if the fees being charged by lenders you are comparing vary significantly. APR is a figure that expresses the cost of the loan including extra costs, such as points and fees, as a percent of the principle. Hence, the higher the fees charged, the bigger the difference between the APR and the initial rate. Because it includes points and fees, APR can help compare various loan options. Make sure you read all pertinent disclosures for origination fees and client discounts as these can affect the APR.
Shopping for current mortgage rates is very easy to do with the help of online rate tables. However, it is important to know what to look for and how to compare the information you find. Shop around and keep these tips in mind to help you find the best way to finance your home purchase.
