subject: What You Need To Know About Getting A Mortgage Rate Quote [print this page] With interest rates at the lowest levels in decades, taking a look at buying a house or refinancing your existing property is more attractive than ever. TV and magazine ads abound for companies offering interest rates that could literally save you tens of thousands of dollars over the life of your loan, even lowering your monthly mortgage payments to a level that gives you extra dollars in your pocket every month. But when you go to have a new rate quote for a mortgage, you'll want to keep several things in mind so you get the best deal on your re-fi or new home mortgage.
First, you should look at the base interest rate you will be accepting. This rate is based off of the Fed's primary interest rate as this is the amount they charge banks and other lenders to borrow money from the government. While some companies are using initial rates that are extremely low in order to attract customers, if they're to be adjusted later as a part of an adjustable rate mortgage (ARM), you may wind up paying more for your loan than accepting a slightly higher, but fixed rate mortgage interest rate.
Processing fees are another way mortgage companies make money. If you pay your processing fees up front, you can actually save yourself money over having those fees rolled up into your overall loan. That's because you wind up paying interest on those processing fees as well as the interest on your mortgage. While it may be a more expensive initial outlay in the beginning, you'll save money in the long run. When getting your mortgage rate quote, keep a sharp eye out so the mortgage company doesn't put those fees into your mortgage payment.
Another way mortgage companies can make more money is by putting the closing costs and other associated fees into your loan. If you can keep those fees out of your loan as well you'll keep from having to pay interest on those fees. Take the time to go over your information carefully so you can keep from paying unnecessary interest.
Now may be the best time to refinance your home or to buy that dream home you have always wanted. Interest rates will eventually go back up so striking while the iron is hot can save you money. However, when getting a rate quote for a mortgage minding the details can keep you from overpaying for a home loan.
