![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
As you search for a new home, one of the most important considerations you’ll be making is in regard to your mortgage interest rate. A mortgage is one of the largest expenses you’ll pay in your life, often the single largest, and even a small gap in interest can make a pretty huge difference over a period of decades.
A mortgage company is only as good as its clients, and at Mortgage Investors Group, we want to give you the tools you need to make educated decisions in important areas like this. Here are three tips we’d offer in terms of covering all your bases while comparing mortgage rates.
Educate Yourself
First and foremost, learn all you can about the kinds of home loans you might qualify for. Decide what your goals are for your purchase – this will help you determine whether you need an adjustable-rate loan or a fixed-rate loan, among other factors.
Get yourself familiar with loan terminology, much of which can be found in our list of resources. Talk to trusted family, friends and financial experts about what types of home loans they’ve had and what their experiences were, so you can get a better picture of your own situation.
Learn About APR and Points
Many people look only at the first percentage figure they’re presented when it comes to an interest rate, but this is typically an incomplete picture. You also need to learn about Annual Percentage Rate and mortgage points.
Annual Percentage Rate (APR) is essentially the complete picture of your interest rate – it factors in the cost of credit, mortgage insurance and loan origination fees, then spits out a yearly interest rate. APR can be adjusted based on mortgage points, which are equal to one percent of the principal amount of the loan. Points affect how you pay closing costs and prepay interest – points can make sense if your cost will be recouped quickly and you plan to stay in the house for a long period of time.
Be Skeptical
In general, if you see rates that just seem too good to be true, they probably are. There are likely significant extra costs. Also be wary of lenders with little or no reputation – check the Better Business Bureau for a grade and any complaints, if you’re unsure. Be wary of lenders’ titles, and don’t put too much stock in these.
For more on shopping for mortgage rates, or to speak to a mortgage lender about any of our other services, contact Mortgage Investors Group today.
