Compare Mortgage

To compare mortgages is to find the best deal on a home loan among many choices in an ever growing lending market. Mortgage rates can vary widely, so learning how to compare mortgage rates may save a lot of money. When comparing mortgages, homebuyers should begin by researching current interest rates. Because rates can fluctuate greatly over a thirty day period, watching the current mortgage market trends can help consumers zero in on the best deals. The lower the interest rate, the lower the monthly payment will be.

Loan shoppers should take some time to contact several lenders. Compare mortgage options from commercial banks, credit unions, mortgage companies, and even mortgage brokers. The rates among these institutions can vary by a percentage point or more. Do not forget to inquire about the down payment required when comparing mortgages. Many lenders demand a down payment of 20% of the home's purchase price. Consumers may be able to put down less, but they will usually have to purchase private mortgage insurance to do so. This insurance can be expensive, so be sure to check prices.

Another point to consider is the Annual Percentage Rate or APR. Lenders are required by the Federal Truth in Lending law to reveal the APR when they advertise their rates. This is done to protect the borrower from hidden fees and costs that could be nestled within a seemingly low interest rate. When it's time to compare mortgages, keep in mind that the APR will show a higher rate on a 15 year loan than a 30 year loan.

Last but not least, loan shoppers need to be careful to calculate the costs of the points and fees that may be charged. Points are paid to the lender for the loan. Each point is equal to 1% of the loan amount. Ask how many points the lender is to be paid for the loan. Typically, the higher number of points you pay, the lower the interest rate turns out to be. The fees paid cover underwriting, closing cost, settlements etc. Many of the fees are negotiable, so when you compare mortgage rates, ask if they will beat a competitor's fee. Lowering the cost of the fees could save money in the long run.

Homebuyers should remember to pray for wisdom when making any type of major financial decision such as purchasing a home or automobile. "Because the foolishness of God is wiser than men; and the weakness of God is stronger than men" (1 Corinthians 1:25). Seeking God's will in your new home search is an important way to glorify Him. It is important to keep this in mind when it's time to compare mortgages.

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