How To Shop For The Cheapest Fixed Rate Loan

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How To Shop For The Cheapest Fixed Rate Loan Powered By Docstoc
					Presented by Daniel Toriola
Mortgage is a kind of a pledge or guarantee made by the home purchaser or borrower to repay the loan to the lender. A right home mortgage loan can save thousands of dollars in the long run. Hence, it becomes very important and crucial to the borrower Click here to know more

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How To Shop For The Cheapest Fixed Rate Loan By J Pisicchio

As interest rates approach record lows, new mortgage applications are up sharply mostly due to an increase in home owners looking to refinance and lower their monthly mortgage payments. Many lenders are advertising interest rates that are below 5%. Others are advertising 'low' or 'no closing costs'. With so many choices, how does one find the best mortgage deal? Shopping for a mortgage on the internet can be very effective. However, if it is not done properly, it can be not only confusing, but lead to very poor results. Finding the lowest interest rate does not mean you have found the best deal. Knowing about APR, Points Charged and the Good Faith Estimate are just as important. If the above does not sound familiar, then you are not ready to make an informed decision about which lender you are going to use. Let's look at each briefly. A point is 1% of your loan amount. As an example, 1 point on a $175,000 loan is $1,750. The money is paid to the lender in exchange for a lower interest rate. Buying points is usually optional. The more points you pay to the bank, the lower your interest rate will be. APR, which is expressed as a rate, is a way to compare offers by multiple lenders. Let's assume one bank is offering 4.75% with 1 point and another bank is offering 4.875% with 0 points. In this example, it's not very clear which lender really has the better deal. One bank has a lower rate while the other has lower fees. Requesting the APR(Annual Percentage Rate)will help make the comparison of the two offers a little easier. Although not completely accurate, generally the lender with the lower APR is the one with the better deal The GFE or Good Faith Estimate is probably the most important part of the mortgage application. It's similar to the sticker price on a car. The GFE is a list of all of the costs associated with your loan. It also includes information about your interest rate and monthly payment. If you truly are looking for the best fixed rate mortgage, don't overlook the GFE. Similar to the dealer sticker on a car, these costs are negotiable if you approach it the right way. If done correctly, it is possible to save $1,000 or more on your loan. Finding the cheapest mortgage rate involves looking beyond just the interest rate itself. These other variables will contribute to locating the best mortgage program. The internet does make shopping easier, however, if you don't understand what you are looking for and how to negotiate with your
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lender, you will never be able to get the best deal and the lowest payment. Getting a mortgage is the biggest financial decision we make in a lifetime. Having an understanding of the process will help you shop correctly and efficiently so that you will get the lowest mortgage payment possible.

A mortgage loan consultant for more than 20 years, J. Pisicchio has spent his career educating consumers about the mortgage process so that they can make the best possible financial decisions.  For more information visit

Mortgage Loan Tips Why some people almost always get the lowest interest rate on their mortgage - for the least points - and NO Junk Fees! Page 2

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Do You Have the Best Mortgage? By Brigitta Schwulst

It's not easy to tell nowadays whether you have the cheapest mortgage interest rate available or the cheapest loan for your specific needs. You basically have to have a degree in finance and law to understand all of the terms and ramifications of each type of loan. And even when you've found the cheapest mortgage interest rate, does that mean you have the cheapest loan? Not necessarily… So finding the cheapest mortgage can be tricky. Sometimes the cheapest rate could cost you thousands extra in the long run. When searching for the best mortgage, you must ensure that you investigate what the total loan will cost before you sign up for that loan. Luckily, applying for a home mortgage is easy because of all the mortgage companies on the internet. With are numerous brokers and mortgage companies who are all competing for your loan, there are lots of people offering mortgages and loans online. You can also find plenty of information on loans, mortgage calculators and tools to help you to work out what the cheapest mortgage will be. But before you rush off and search for a loan company, make sure you shop around for the cheapest mortgage. Ask about those hidden costs and fees. By using a mortgage broker, you can also accumulate a lot of quotes in a relatively short period of time which can help you find the best mortgage for you. Your credit score also determine rates. Make sure you know what your credit score is and take as many steps as is necessary to improve your credit rating. A good credit rating could mean a cheaper rate. Choose a company that will give you a free credit report and then use the tools to improve your credit score. Decide on the type of loan you want. Research the difference between a fixed rate loan and variable rate loan. Each has advantages and disadvantages so make sure you choose the best type of loan for you. With a fixed rate home mortgage, loan repayments are fixed for a period of time or for the entire loan period. This home mortgage loan is good for times when interest rates are expected to climb. They protect you from higher repayments. For a variable rate home mortgage the payments fluctuate along with the mortgage interest rate. These loans are best when the interest rate is high. When it falls, so do your payments. Also decide whether you want to apply for a home loan or a home equity line of credit, since this may also save or cost you. The main difference between a HEL and a HELOC be found in the type of credit they provide - one is similar to a revolving type of credit, the other is a flat loan. The home equity loan has fixed repayment which you pay off over a fixed period. Once you've paid off the low interest home equity loan, you'd have to apply for a new loan, should you wish to lend a new amount. These loans are good for a specific one time purpose such as home renovations, buying a car, paying off an asset.

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A home equity line of credit, is a revolving loan, where the repayments on the loan vary, as does the repayment period depending on the amount you've drawn against the low interest home equity loan. A HELOC is great when you have ongoing cash needs like continuous tuition bills, medical bills etc. But whether you’re looking for a fixed or variable rate loan, a HEL or an HELOC be sure to shop around for the best mortgage. It could save you thousands in the long run. With two degrees in business and law, Brigitta writes articles on various financial topics. For more info visit for mortgage info or for loans or for a free credit report

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