Compare Mortgages Rates and Home Loans: What You Need To Know
When shopping for a mortgage it is of utmost importance that a consumer compare mortgage rates from different lenders. By comparing rates, consumers protect themselves from higher than average rates and keep their lender honest. At KnowYourBank, we believe that as a consumer if you have not spoken to at least three different lenders than you have not done enough diligence to take a loan and rate from any lender.
Research On The Importance Of Mortgage Rate Shopping
Research from the CFPB (Consumer Financial Protection Bureau) on the importance of comparison shopping for mortgage rates clearly lays out the reasons for being a choosy rate shopper. In their article they state that mortgage rates on a conventional 30 year loan can vary for the same shopper by up to 50 basis points (.50%) or half a percent in normal person speak, that creates a huge difference over the life of the loan, and can mean either thousands of dollars saved or lost. So even if it is annoying and takes time it is absolutely crucial for consumers to shop around for their home loan and compare mortgage rates.
How To Find The Best Mortgage Rate
If you want to find the best mortgage rate you need to contact as many banks as possible. There are a couple of different ways you can do this – 1) You can search for banks close to you on google and get their numbers and call them and ask them what their rates are and what types of loans they offer 2) Use a mortgage rates aggregator like Zillow, Bankrate, or LendingTree 3) Use the CFPB Mortgage Interest Rate Explorer 4) Find a mortgage broker who will do most of the work for you. It is important to remember that a mortgage broker will take a fee and that will add some cost on to your mortgage. At the same time that mortgage broker is helping you find the best rate they can and that takes some weight off of you as you’re not on the search alone. As a result, the fee that you pay a mortgage broker may be worth the trade off of your time saved. In the end, you will still need to do some basic research yourself to make sure the mortgage broker is honest and that they are finding you rates that are within the range of those that are publicly available on the aggregator sites. In the end the key to the whole home loan shopping process is doing as much diligence as you can on your potential lender and to compare mortgage rates to a point where you feel comfortable that you are getting the best rate.
Other Things To Consider When Applying For A Mortgage
Below are a couple of different articles we have written on mortgages, read these to learn more about the mortgage process so that you can be a prepared buyer.
Income Verification For Mortgages