Lender411.com Articles Mortgage Rates

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You would think, with all the new regulations in place for mortgage brokers and banks that the consumer would have an easier time trying to find out if they're actually getting a good "deal" while shopping for a mortgage. How does one really know that they are in fact getting the lowest rate and paying the lowest fees in shopping for new mortgage?

In my many years of experience,I still got a lot calls from people asking me "what's your rate?" It's like one was just shopping for a light bulb and a mortgage was a mere commodity.

With all the advertising on television, newspapers and the internet people are constantly being bombarded with images of super low rates. It's no wonder the consumer thinks that there might be some magical super low rate, which is not realistic or "in the ballpark" available to them. In the end, the consumer usually finds out that "if it sounds too good to be true, it usually is." Make sure the rate that is being advertised is for the loan program that you are looking for (in other words if you want a 30 year fixed make sure you are not looking at a 5 year arm rate). In addition,many people don't realize that there are price adjustments to the rate for getting cash out, loan to value, property type, credit score, whether the property is owner occupied or an investment property and many other factors.

The government has tried to level the playing field by requiring mortgage bankers and brokers to quote their rates along with the APR. This would be great if all companies used the same formula, like they are supposed to, but it doesn't appear that they do.

It has also been my experience that when I see a super low rate advertised, the rate shown may come with the cost of a point buy down, which means every that for every point one is willing to pay to "buy down" the rate,that point represents a cost of 1% of the total loan amount. On a $300,00 loan, that's an additional $3,000 in total loan costs. Points can be very costly for the consumer. I have also found that points may be attractive to get a lower rate but is usually used when making a home purchase, when the seller is willing to pay the points. I have found that it is usually far less attractive to a home owner, conscience of total closing costs, when doing a refinance and the home owneris the one paying the points to get a lower rate.

If I were looking for a mortgage, I would find out exactly with the" total closing costs" are, including all of the fees associated with the new mortgage. This should include all of the fees and will give you a more accurate comparison. Many companies advertise teaser rates just to get the telephone to ring but after careful evaluation of the total costs, you may discover that what sounds too be good to be true usually is.

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