How To Compare Mortgage Quotes

How To Compare Mortgage Quotes

How to​ Compare Mortgage Quotes
So you're interested in​ buying a​ house and you're looking at​ home mortgages online .​
Whether you've decided on​ a​ fixed rate mortgage,​ an​ adjustable rate mortgage or​ any of​ the​ other various types of​ mortgages offered,​ there are several things to​ be sure to​ look at​ when comparing the​ offers.
The first,​ and most obvious,​ is​ the​ interest rate .​
Since for the​ first few years your payment will be mostly interest with little going towards equity,​ your interest rate is​ very important .​
a​ slight difference in​ interest rate can make a​ big difference in​ your monthly payment .​
And the​ larger your loan balance,​ the​ larger this difference will be .​
While 1/8 of​ one percent might not affect your payment by a​ huge amount,​ 1/2 of​ one percent certainly will .​
And if​ your finances are tight,​ then every dollar will count .​
One way lenders lower rates is​ by charging you​ points which is​ simply money paid upfront in​ order to​ get a​ slightly lower rate .​
Make sure you​ are aware of​ any fees you​ are being charged as​ you​ may have to​ pay a​ lot more to​ get the​ loan from one lender than from another.
Another thing to​ look at​ is​ the​ APR .​
You see it​ all the​ time .. .​
but what does it​ really mean to​ you? the​ Annual Percentage Rate is​ actually the​ cost of​ interest plus any other fees being charged by the​ lender over the​ life of​ the​ loan .​
The APR will always be higher than the​ interest rate .​
By comparing the​ interest rate and APR of​ one lender to​ the​ interest rate and APR of​ another lender,​ you​ will get an​ idea of​ who is​ charging more fees .​
For example,​ if​ one lender offers an​ interest rate of​ 6.35% with an​ APR of​ 6.54% and another lender offers an​ interest rate of​ 6.25% with an​ APR of​ 6.97%,​ the​ second one is​ charging more fees .. .​
and will ultimately cost you​ more .​
Ask the​ lenders what fees are included in​ your quotes for home mortgages online so you​ can compare apples to​ apples.
Some other items to​ compare would be -
1 .​
The lock-in terms (is it​ for the​ same amount of​ time,​ what if​ interest rates go down,​ etc.)
2 .​
is​ there a​ pre-payment penalty (many loans do not have pre-payment penalties and even if​ yours does,​ it​ may or​ may not be an​ issue,​ depending on​ the​ conditions)
3 .​
What are the​ closing costs and fees (this money will need to​ be paid upfront or​ financed in​ the​ loan which will then affect your payment somewhat)
4 .​
Ask for a​ Good Faith Estimate (compare the​ GFE from each lender and be sure that everything is​ as​ you​ understood it​ to​ be)
Customer service is​ extremely important .​
If you​ have questions when making your comparisons,​ call them and see how timely and informative your conversations are .​
If you​ have trouble getting answers before you​ start your loan,​ you're likely to​ have trouble during your loan process also .​
You want a​ lender who is​ quick to​ return your calls and responsive to​ your questions.
Searching for home mortgages online simplifies this process as​ you​ can submit your information one time and get quotes from several lenders at​ once .​
Then you​ can do your comparisons and make your decision after looking at​ the​ offers from all angles.

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