- 1). Prepare a mortgage worksheet. You can prepare one from scratch, or you can use the template provided by Freddie Mac (see Resources).
- 2). Obtain information from multiple sources, including thrifts, banks, mortgage brokers and credit unions. Check online mortgage rate information sources, such as Bankrate.com, to compare rates locally and nationally (see Resources). Record the information on your worksheet.
- 3). Compare rates for different mortgage types --- fixed or adjustable--- and terms --- length in years. Look for, and ask for, the annual percentage rate, or APR. The APR is the annualized rate that includes the base interest rate, plus any points, fees and other charges. You may be required to pay for mortgage insurance if you're not making at least a 20 percent down payment.
Mortgage brokers are usually paid a fee for their services. It may be in the form of "points" paid at closing, as an add-on to your interest rate or both. Make sure you know the details. - 4). Negotiate the best possible deal. After deciding on a lender, try to reduce the add-on fees and even the interest rate. There's no harm in trying to negotiate the best possible deal. Once you're satisfied with the terms, obtain a written lock-in to protect the APR until closing. In a period of falling rates, however, you may end up locking in rates that are higher than the ones at closing.
- Advertisement -
- Advertisement -