When buying a home, you shop around for the house that best suits your wants and needs. But did you know that you should do the same for your mortgage?
One of the first things you should look at when comparing mortgage offers is the interest rate. Generally, the lower the interest rate, the better for you and your expenses. Even a slight difference in interest rates can mean a lot of money over the life of a loan. Make sure you understand if the rate offered includes discount points, which is money you pay up front to lower your interest rate.
But the interest rate isn’t the only rate to look for. Another good benchmark for comparing offers is their annual percentage rate (APR). This figure combines the interest costs and other fees charged by a lender over the life of the loan, and expresses them as a yearly percentage. Make sure to ask for an itemized list of what’s included in each APR calculation, so you know you’re making a fair comparison, as some lenders don’t include all of their fees in the calculation.
Other details matter too: Do the lock in terms vary? Is there a pre-payment penalty? What are all the closing costs and fees? Ask for a read a Good Faith Estimate (GFE) for each loan, and ask questions if something doesn’t make sense.
Last, you’ll also want to consider customer service. Look for a lender who is quick to return calls and responsive to your questions.
LendingTree® makes it easy and convenient to shop for a mortgage. Just fill out one simple form and get several offers from which to choose. Or call 1-888-624-2206 to speak with a loan specialist now.
Next step: Get preapproved by your lender.
Back: Step 4: Get prequalified for a mortgage.
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