The internet is a wealth of information and it is often my first choice when I need to research information on just about anything. So, when I wanted to find the best mortgage rates available I naturally went to my computer to do the research. I typed in “best available mortgage rates” and in less than a second, Google returned over a million results. Like most people, I found this a little overwhelming.
After clicking on a few of the top results, I quickly realized that researching mortgage rates online was going to be a little harder than I had first anticipated. In order to get an online quote, you really need to provide a lot of detailed information such as type of mortgage you are looking for, loan amount, location of property (usually state and zip code), and number of points you want to pay. Here are a few tips to help you navigate through the sea of mortgage rate information so you can find the best rate available:
Know the differences between various types of mortgage loans. Most people know what a 30 Year fixed loan is, but do you know what a 5/1 ARM loan is? Don’t just jump on this type of rate because it is lower than other rate types. You need to know that the initial lower rate will increase over the period of your loan. In order to ferret out the best rate for your situation, you need to know exactly what the terms of your loan will be. Understanding the differences between mortgage loan types is a crucial first step in finding a mortgage rate.
Know your credit score. All mortgage rates take into consideration your credit rating. The rates quoted on most sites use a good or excellent credit rating. All three of the credit reporting agencies (Equifax, Experian, and Trans Union) will provide a free credit report to you once a year upon request. Some sites will allow you to put in your credit rating to provide a more accurate quote.
Know the rate details. There are many mortgage rate charts on the internet, but unless you know what the rates are comprised of, the information is useless. Each mortgage rate chart should display a current date and a title such as “California 30 Year Fixed Rates.” Most reliable sites will also include a note regarding the number of points used to calculate the stated rate. Remember, the higher the points, the lower the mortgage rate.
As with any information you get off the internet, you need to be cautious. Familiarize yourself with different mortgage types and know your credit rating. Keep in mind, if the advertised rate looks too good to be true, it probably is. Remember, mortgage rates should be similar from one site to another. Dishonest sites will advertise really low rates to lure you in. Most importantly, if you cannot determine the details of a rate published online, look elsewhere.