WHAT YOU NEED TO KNOW WHEN COMPARING THE BEST MORTGAGE RATE

FOR THE BEST MORTGAGE RATE, DO YOUR HOMEWORK FIRST, FIND OUT WHAT THE COSTS WILL BE WHEN A REFINANCE MORTGAGE IS YOUR PLAN

When comparing refinance loans for the best mortgage rate be sure to have the loan agent explain the various types of loans available. To get that best mortgage rate it's probably best for you to do a little homework and get basic information on various loans. It will also time find the right lender who you feel comfortable to do business with to get the best mortgage rate, so take your time.

Then by the time you are ready to start your comparison shopping for the best mortgage rate you will be prepared to find the loan with your original goal, eliminate debts, right?

Also very important, is to ask questions and get a clarification on loans that you don't understand or programs you may be interested in. The loan officer who takes the time to educate you and can explain it to you in a language that easy for you to understand and is up front with you will probably know what's best for you.

BUYER BEWARE

Beware of the vague answers or switching tactics that the mortgage industry is known. Be realistic and know how much of a down payment you can afford. If you don't have an amount then you probably are premature in the loan process unless you are taking the time know to learn about finding a loan that you can afford.

For the best mortgage rate know how much down payment you have then it doesn't hurt to research and find out the costs involved in the loan. Although it is very difficult to really know the cost you can get an approximation. As a rule of thumb use the 2.5% to 6% range for the cost of a loan over and above your down payment.

Knowing just the amount of the monthly payment or the interest rate is not enough. For the best mortgage rate be sure you are comparing apples to apples and not apples to oranges. Always ask for information about the same loan amount, loan term, and type of loan so that you can compare the information.

The following information is important to get from each lender and broker:

RATES ?

When asking the lenders and brokers for the best mortgage rate it's best to get a range of what they can offer.

Why a range? Until you know your credit score you do not know what loan or program you can qualify. Of course there are other factors but a broker will not be able to quote accurate rates for you.

Also note the programs your lender or broker is talking with you about. There are numerous variations of the same loan and many times it is very confusing.

The best rule of thumb about rates is to find out in the newspaper or go online and find out the daily rate one of the popular banks are advertising and that will give you a feel to where the market is at. Now if you have bad credit you can expect to pay more than what is advertised.

While asking for the best mortgage rate, find out whether the rate is fixed or adjustable. Keep in mind that when interest rates for adjustable rate mortgages go up, so does the monthly payment. Also if the mortgage you are seeking is an adjustable rate loan find out how your rate and loan payment will go up or down. Have them explain this is dollars and cents.

If your lender know their product they will be able to explain it in simple terms. If you get unsatisfactory answers have them explain again.

MORE COSTS, HOW ABOUT APR

Learn about the loans annual percentage rate (APR). The APR takes into account not only the interest rate but also points, broker fees, and certain other credit charges that you may be required to pay, expressed as a yearly rate. The APR is the sum total of all the cost plus the agreed upon rate that you will be getting. You will be able to get all this information in the RESPA (Real Estate Settlement Procedures Act) packet when a lender has you complete a 1003 Real Estate Loan Application.

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 Curt de la Cruz is a free lance writer and is a professional in the mortgage industry. Visit his website at 101-credit-debt-finance.com