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How Can I Find The Best Mortgage Rate?

How Can I Find The Best Mortgage Rate?

Purchasing a home is likely to be the largest expense any consumer undertakes and most of us will be unable to pay for the purchase in cash. Qualifying for and obtaining a mortgage with reasonable terms and the best interest rate possible should be a top priority for most prospective home buyers. This leads many consumers to ask themselves how can they find the best mortgage rate without going crazy?

Comparison Shop

As with any other purchase, it is necessary to comparison shop when trying to find the best mortgage rate. This is an unavoidable step in the mortgage process and will take significant time and a lot of speaking with loan officers. Use multiple resources such as physically visiting local financial institutions, calling 800 numbers for nationally recognized banks and credit unions and visiting reputable online websites for industry recognized mortgage leaders. All of this may be a requirement if you have questionable or bad credit where qualification for a mortgage may be difficult with just one or two mortgage lenders.

Competitive Bidding

Once you have narrowed down the list of possible mortgage lenders, try getting them to offer competing bids for your business. This is a common technique which only comes in to play for large purchases like homes and automobiles. It might seem disingenuous to play businesses against each other but the payoff can be significant. Mortgage lenders know that the revenue generated from both the closing costs an ongoing interest payments is worth their time to compete for a sale. Let their greed for your business work to your advantage by getting multiple competing bids.

Internet Quotes

Your best bet for finding the best mortgage rate is using Internet resources. This allows you to find qualified and reputable mortgage companies but also narrow the list by comparing published terms and interest rates. A consumer can easily submit a dozen or so Internet quotes via a lender's website and then receive e-mailed loan documentation or a personalized phone call to follow up on the results. This allows you to prequalify for mortgages at your convenience without having to spend all day on the phone or running around town. Use technology to your advantage when trying to find the best mortgage rate.

Protect Yourself

One important aspect to keep in mind when looking for the best mortgage rate online is to protect your personal information. There are a significant number of scam web sites which try to obtain personal information like Social Security numbers and dates of birth to use for identity theft. Only apply for online mortgage quotes from nationally or regionally recognized mortgage leaders and other reputable financial institutions. Go with your gut and if a web site seems fishy or too good to be true then avoid it completely.

Make It Personal

The reason why many consumers find it difficult to get the best mortgage rate is because of the amount of work involved. Interest rates for mortgages, automobiles and credit cards are tailored specifically for each consumer based off of their credit history and credit score. While most mortgage quotes should be fairly consistent across lenders some may be more punitive than others when personalizing your loan. Provide as much personal information as possible so your rate can be calculated accurately. The lower your interest rate on a mortgage the more money that is saved over the life of the loan.

Image by: Chris Bohn