Shopping for Rates
When shopping for a good interest rate, your first
step is to understand all the related concepts, such
as points and lock-ins. To get consistent quotes, you
must standardize the number of points you wish to pay
up front and the amount of time you want to lock in.
Even if the number of points or lock-in period you use
to get your quotes isn’t what you eventually settle
on, they give the rates a common point of reference
so you can make a meaningful comparison.
You’ll also need to ask for all your quotes at
approximately the same time. Getting quotes at a variety
of different times can lead to a poor comparison, since
the market can fluctuate very quickly. This quality
makes getting quotes online particularly useful, since
you can get a large number of quotes quickly and efficiently
on the Internet. Time is of the essence when comparing
interest rates to find the best lender.
However, if you choose to call individual lenders to
make your comparisons, be careful. Many lenders are
honest and trustworthy, but some will give you an unrealistically
low quote to get your business when they can tell you
are shopping. Obviously, you don’t want to get
your mortgage from a lender who would give you a dishonest
One way to combat this is to get a recommendation from
a family member or friend who already has a mortgage.
Even with the recommendation, you will still want to
shop around for rates. After your shopping is completed,
call the lender that was recommended to you. He | she
will let you know if any of the quotes you received
from other lenders are unrealistically low. He | she
will likely also match any legitimate quote you received
from other lenders. Though possibly more time-consuming,
by going through this extensive process, you will be
more assured of getting a great rate from a lender who
you feel confident that you can trust.