Mortgage Shopping Simplified: Finding the Best Rates and Terms

Shopping for a mortgage can help you secure the best financing deal for your home purchase, refinancing, or home equity loan. Just like any other product, the price and terms of a mortgage may be negotiable. By comparing and negotiating, you could save thousands of dollars. In this comprehensive guide, we will walk you through the process of shopping for a mortgage, obtaining cost information, finding the best mortgage rates and terms, and negotiating for the best deal.

Mortgages are available from different types of lenders, including thrift institutions, commercial banks, mortgage companies, and credit unions. Contact multiple lenders directly or you a comparison mortgage site to ensure you're getting the best price. You can also work with a mortgage broker, who will find a lender for you. However, it's essential to contact more than one broker to compare their fees and services.

Gather information about mortgage rates from several lenders or brokers. Understand the costs involved in the loan, such as down payment, monthly payment, and mortgage rates. Ask for information about the same loan amount, term, and type for easy comparison. Important information to obtain includes:

Loan Type

Purchase Refinance with Cash out Refinance

State

Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District Of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming

FICO Score

Superior (780-850) Exceptional (760-779) Excellent (740-759) Very Good (720-739) Good (700-719) Above Average (680-699) Average (660-679) Fair (640-659) Need Improvement (620-639) Poor (350-620)

Loan Amount

$

Points

Up to 0 points Up to 0.5 points Up to 1 points Up to 1.5 points Up to 2 points Up to 2.5 points Up to 3 points

LTV

%

Loan Term

 15-Year Fixed  20-Year Fixed  30-Year Fixed  5-Year ARM  7-Year ARM  10-Year ARM

Show Advertiser Disclosure

The lenders whose rates and other terms appear on this chart are ICB's advertising partners. They provide their rate information to our data partner RateUpdate.com. Unless adjusted by the consumer, advertisers are sorted by APR from lowest to highest. For any advertising partners that do not provide their rate they are listed in advertisement display units at the bottom of the chart. Advertising partners may not pay to improve the frequency priority or prominence of their display. The interest rates, annual percentage rates and other terms advertised here are estimates provided by those advertising partners based on the information you entered above and do not bind. Any lender Monthly payment amounts stated do not include amounts for taxes and insurance premiums. The actual payment obligation will be greater if taxes and insurance are included. Although our data partner RateUpdate.com collects the information from the financial institutions themselves, the accuracy of the data cannot be guaranteed. Rates may change without notice and can change intraday. Some of the information contained in the rate tables including but not limited to special marketing notes is provided directly by the lenders. Please verify the rates and offers before applying for a loan with the financial institution themselves. No rate is binding until locked by a lender.

Lender

APR / Rate

Fees / Points

Payment

NMLS #401822

5.661%

15-Year Fixed

5.375%

$7,500

Includes 0.875 points for $3,500

Lender Fees: $4,000

$3,242 /mo

Next >

NMLS #1025894

5.805%

15-Year Fixed

5.625%

$4,680

Includes 0.995 points for $3,980

Lender Fees: $700

$3,295 /mo

Next >

NMLS #6606

6.022%

15-Year Fixed

5.875%

$3,792

Includes 0.948 points for $3,792

Lender Fees: $0

$3,349 /mo

Next >

NMLS #1025894

6.839%

30-Year Fixed

6.750%

$3,664

Includes 0.741 points for $2,964

Lender Fees: $700

$2,595 /mo

Next >

NMLS #401822

6.884%

30-Year Fixed

6.750%

$5,495

Includes 0.875 points for $3,500

Lender Fees: $1,995

$2,595 /mo

Next >

NMLS #3030

6.889%

15-Year Fixed

6.750%

$3,500

Includes 0.875 points for $3,500

Lender Fees: $0

$3,540 /mo

Next >

NMLS #6606

6.963%

30-Year Fixed

6.875%

$3,580

Includes 0.895 points for $3,580

Lender Fees: $0

$2,628 /mo

Next >

NMLS #3030

7.602%

30-Year Fixed

7.500%

$4,000

Includes 1.000 points for $4,000

Lender Fees: $0

$2,797 /mo

Next >

Rate data provided by RateUpdate.com. Displayed by ICB, a division of Mortgage Research Center, NMLS #1907, Equal Housing Opportunity. Payments do not include taxes and insurance premiums. Actual payments will be greater with taxes and insurance included. Rate and product details.

• Current mortgage rates and if they are the lowest for that day or week.
• Whether the rate is fixed or adjustable, and how the rate and payment will change.
• The loan's annual percentage rate (APR), which includes points, broker fees, and other charges.

Finding the Best Mortgage Rates and Terms:

To find the best mortgage rates and terms, you'll need to research and compare offers from various lenders. Here are some tips for finding the best mortgage rates and terms:

• Check online comparison websites: Many websites, like MonitorBankRates.com offer mortgage rate comparisons, which can help you find the lowest rates and best terms available.
• Monitor daily mortgage rate fluctuations: Mortgage rates change daily due to market conditions. Keep an eye on mortgage rate trends to know when it's the right time to lock in your rate.
• Consider different loan types: Different loan types come with varying rates and terms. Compare conventional, FHA, VA, and USDA loans to determine which one suits your needs and financial situation.
• Look for lender-specific promotions: Some lenders offer promotions, such as reduced fees or lower interest rates, to attract borrowers. Keep an eye out for these promotions, as they could save you money.
• Maintain good credit: A higher credit score will help you secure a lower mortgage rate. Make sure your credit is in good standing before applying for a mortgage.

Understand Points and Fees:

Points are fees paid to the lender or broker and are often linked to the mortgage rate. Generally, the more points you pay, the lower the rate. Be sure to ask for points to be quoted in dollar amounts for easy comparison. Home loans involve various fees, such as origination, underwriting, and closing costs. Negotiate these fees, as some may be negotiable.

Down Payments and Private Mortgage Insurance (PMI):

Lenders may require a down payment, typically 20% of the home's purchase price. Some loans require less than 20%, but this may involve purchasing PMI to protect the lender. Government-assisted programs like FHA, VA, or Rural Development Services may have smaller down payment requirements. Inquire about the lender's down payment requirements and PMI costs, if applicable.

Negotiate for the Best Deal:

Once you know what each lender offers, negotiate for the best deal. On any given day, lenders and brokers may offer different prices for the same loan terms. The difference in price could be due to loan officers and brokers keeping some of the difference as extra compensation. Ask the lender or broker

to write down all the costs associated with the loan and inquire if they will waive or reduce fees, agree to a lower rate, or charge fewer points. Ensure that the lender or broker isn't lowering one fee while raising another or lowering the rate while raising points. Don't hesitate to ask lenders or brokers if they can offer better terms than their original quotes or those found elsewhere.

Lock in Your Mortgage Rate:

Once you are satisfied with the negotiated terms, you may want to obtain a written lock-in from the lender or broker. The lock-in should include the agreed-upon rate, the duration of the lock-in, and the number of points to be paid. A fee may be charged for locking in the loan rate, which may be refundable at closing. Lock-ins can protect you from rate increases while your loan is being processed; however, if rates fall, you could end up with a less favorable rate. In such cases, try to negotiate a compromise with the lender or broker.

Shop, Compare, and Negotiate

When shopping for a mortgage, remember to shop around, compare costs and terms, and negotiate for the best deal. Local newspapers and the internet are great starting points for researching loan offers. Check rates and points from various lenders and don't forget to inquire about fees. Use a Mortgage Shopping Worksheet to help you keep track of the information you collect. Encourage lenders and brokers to compete for your business by letting them know you're shopping for the best deal.