What is the best way to go about getting a home mortgage. I'm looking at buying my first house in the next couple weeks and don't want to get screwed. Are all brokers and banks going to have about the same rate or can they be very differant. I've talked to 2 mortgage brokers and a bank and the estimated payments seem to be much differant between them. I mean one lady said I could get a 6.375% interest rate and another lady said 6.875%. How can they be that much differant if there looking at the same credit report and same income. What should I be looking for?
The products might be different and thus will have different rates. Generally, the longer the term of the loan, the higher the rate. Also, some loans won't charge you closing costs but to get that money back will charge you a higher rate. One of those loans may have had points. Basically you have to compare apples to apples, which includes, term, closing costs, points and rate.
How long do you plan to stay in the house? How much are you putting down?
How long do you plan to stay in the house? How much are you putting down?
Points, aka, 1% of the loan balance as an additional cost to you, the borrower. 1 point is equal to approximately 1/8 of 1 percent on the APR, not the note rate, but what you actually pay-the annual percentage rate. So, with a loan broker, he/she has to be paid, so the points typically go up while the note rate stays similar. Getting a loan at par (without anyd points) is where you should begin to shop, then make adjustments to the individual lenders offer until you get the deal you want. On the surface, I would suggest you go direct to the lender, forgo the loan broker and get the deal done at par. The difference you will most likely see is in the monthly payment.
