By: Edward McCarthy
President: Sell By Owner Listings, Inc.

Getting the Best Home Mortgage Interest Rate

Shopping around is the only way you can be sure you are getting the best home mortgage interest rate. When you have several rates to compare to each other, then you can better determine which of those rates is the best home mortgage interest rate.

Mortgages are available from several different sources. Mortgage companies, mortgage brokers, savings and loans associations, and credit unions are all sources of mortgages. Since there is no way of knowing which of these entities will give you the best home mortgage interest rate, the best thing to do is get at least one quote from each of these. Keep in mind that to borrow money from a credit union, you must be a member of that credit union.

To ensure you are getting the best home mortgage interest rate, you should ask each lender for a list of current interest rates for mortgage. You also need to know whether those interest rates are quoted for the day or the week. This will give you an indication as to the length of time you have to apply for the mortgage to receive the rates included in the list. It is also important that you know whether the rates you are being shown are fixed or adjustable. Fixed rates will remain the same throughout the life of the loan while adjustable rates can increase or decrease over time.

The best home mortgage interest rate is accompanied by the lowest annual percentage rate, or APR. The APR includes more than just the interest rate that applies to the loan. It also includes points, broker fees, and other charges that you are required to pay. The APR is expressed as a yearly rate. The APR is important for determining the best mortgage interest rate because it is possible for charges other than the interest rate to be higher.

Remember that you are not locked into the numbers written on a piece of paper. You have the ability to negotiate with a lender to receive the best home mortgage interest rate. On any given day different customers receive different terms for the same loan. In many cases, the amount quoted to you by the loan officer or broker contains unnecessary overages that can be negotiated. Don't wait for a loan officer to offer you the best home mortgage interest rate, instead you should ask for it.

Once you are given a quote by a lender, have the loan offer break down each of the costs that are associated with the loan. You may notice that some of these costs seem out of the ordinary. Start negotiating the best home mortgage interest rate by asking the lender to waive or lower some of the fees associated with the loan. Alternatively, you can ask for the interest rate or points be reduced. During the process, make sure the lender isn't reducing one cost or fee and simultaneously increase another.

When you feel you have negotiated the best home mortgage interest rate with a lender, you should request a written lock-in from the lender. Included in the lock-in should be the rate and fees that you agreed upon. By doing this you protect yourself from rate increases that can occur while your loan is being processed.

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