Compare Mortgage Rates - Comparing Mortgage rates

Have you always dreamt of owning your own home? Do you think it is high time you make that dream come true, but reality is tougher and you don’t have enough means to make your dream come true? Well, do not worry any more. Where there is a shortage of money there is the solution too, in the form of mortgages. A mortgage can help you by giving you an alternative financing option that can help you realize your dream.

A mortgage is a procedure guided by law through which a borrower applies for a loan for acquiring money to buy a home for personal use, or to buy an official or commercial residential space. That very property is held as the security for the loan that is due. Therefore, to look at it in simple terms, a mortgage involves two parties -that is, the one who lends the money or lender, and the borrower - the one who borrows the money by keeping the property as a security to the lender.

Mortgage lenders are worried about your financial potential to pay off the loan and debts and regularly paying the installments on a monthly basis as agreed in the mortgage contract to clear the debt. So, they will judge your loan application on the basis of your credit score, your monthly net earning, and the amount of money you can shell out as the down payment.

The loan amount depends on the worth of your home and the down payment. The interest rate charged on your loan depends upon your credit score, discount points and down payment. The better your score and the greater is the amount of your down payment and higher are your credit points, the lower is the rate offered. Getting a lower rate is also likely if you can give a part of the loan amount as prepaid interest or points. You may receive a loan at fixed rates, variable or adjustable rates or a combination of both the rates.

Remember, a mortgage is a financing option so whether it’s a home purchase, a refinancing, or a home equity loan, a mortgage is a product. Therefore the costs and conditions of mortgage are opens to discussion. You should compare all the costs involved in obtaining a mortgage, or the mortgage rates as comparing and negotiating may save you a lot of money.

There are mortgage brokers who will organize transactions rather than lending money directly. They find a lender for you. A broker usually knows several lenders so that means you have a great variety of loans with different costs and conditions, so you can opt for the one that suits your needs the most. You should be contacting more than one broker, just as you would with banks.

Some financial bodies function as both lenders and brokers. Also many brokers’ advertisements do not use the word "broker", so make sure that you ask beforehand if a broker is involved. This is important for you because brokers are usually paid a fee for their services and this fee is at an extra cost to you. Confirm from each broker that you would like to hire how he or she will be remunerated for the services they render, so that you are able to compare the different fees. Be prepared to bargain with both the brokers as well as the lenders.

Find out about mortgages from many lenders or brokers. Be sure of how much of a down payment you can pay, and ask for and calculate all the costs involved in the loan. Knowing just the amount of the monthly installments or the interest rate is not all that you will need to know.

Find out all your information based on the same loan amount, loan term, and type of loan from all the financial institutions and brokers so that you can compare the costs. Ask every lender and broker that you contact for a list of its present mortgage interest rates, and find out if the rate is fixed or adjustable. Remember when interest rates for adjustable, the interest rate can increase and so will the monthly payments.

If the rate quoted is for an adjustable-rate loan, clarify how your rate and loan payment can change. Likewise, find out if your loan payment will be less if rates fall. Find out the loan’s annual percentage rate or APR. The APR takes into consideration not only the interest rates but also points, broker fees, and certain other credit costs that you may be under obligation to pay, on a yearly basis rate.

Some lenders require 20 to 30 percent of the home’s purchase price as a down payment. Some lenders these days also offer loans that need less than 20 percent down payment. Your lender will usually want you to obtain private mortgage insurance (PMI) to protect the lender in case you can’t clear your debts. Incase you do have to include a PMI is required for your loan, then clearly clarify the total cost of insurance and what will be your monthly installments and till when will you have to pay for PMI.

Follow our mortgage guide and compare the mortgage rates. Don’t forget to negotiate and you will have no problem selecting the right mortgage.