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Compare Multiple Mortgages and Save Money

 

When looking for a mortgage, it’s important to shop and compare in order to find the best deal. However, you need to compare multiple aspects of your mortgage, not just one thing such as the length of the loan or the interest rate.

Things you should include in your comparison are:

  • The type of rate. Is it fixed, adjustable, or balloon?
  • The minimum down payment. Are you putting down 20% or 25% of the total purchase price?
  • The length of the loan. Is the length of the loan 10, 15, 20, 25 years or more?
  • The interest rate and annual percentage rate. These numbers represent how much interest you will be paying on the money borrowed.
  • If you are putting down less than 20% of the purchase price to buy the home, you may be asked to pay Private Mortgage Insurance. Include that in your comparison as well. How long you have to pay PMI can make a huge difference in the amount of money you pay for the entire loan.
  • The monthly payment of taxes for the escrow and any other insurance that may be involved such as hazard insurance.
  • The total monthly payment you expect to pay based on all these terms. It should already be calculated for you when getting quotes and information from the broker or lender.

Be sure to include all other fees and expenses that are associated with the mortgage and closing the deal in your comparison. These fees are:

  • Application fee
  • Loan processing fee
  • Appraisal fee
  • Underwriter fee
  • Lender fee
  • Attorney fees
  • Broker fees
  • Credit report fee
  • Document preparation fee
  • Any other fees that may have been included with the specific mortgage
  • Title insurance, taxes
  • The cost of any home inspections, surveys or flood determination
  • Closing costs
  • Prepayment penalties.

This is a lot of stuff to compare when looking at a lot of different mortgages. You may want to use a spreadsheet on your computer to keep track of all of the information. Look at total cost as well as terms and you should be painted a clear picture of your financial future regarding your mortgage.


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