How to Find the Best Mortgage Rate

After getting mortgages for nearly 20 years on single-family homes and condos, I have some important tips and insights.

• Your real estate broker will probably try to get you to use a mortgage broker or lender they have a relationship with. While this might be worth exploring, it's probably not the best idea as your broker probably has an incentive they (not you) benefit from.

• The bank where you have your checking account is always chomping at the bit to give you a mortgage or sell you a multitude of financial products. In my experience, you rarely find good mortgage rates and terms at a commercial bank. Bank employees are solely motivated by internal referral incentives and bonuses.

• There are numerous private mortgage brokers seeking your business. Beware of the broker, as they have competing interests with yours, and their commissions improve as your mortgage terms worsen.

• Mortgages are nothing more than a commodity financial product for the conventional conforming mortgage market, and you need to shop widely and aggressively to get a good deal. I would recommend getting at least a dozen quotes. Also, to keep things simple, do zero-point fixed-rate 30-year loans so you can easily compare the rates and fees. I would recommend these three websites:

  • www.rocketmortgage.com

  • www.lendingtree.com

  • www.bankrate.com

• So, if you use these three lending websites, you will likely end up with a dozen or more quotes from various lenders. Identify your best three quotes and negotiate directly with lenders/brokers from there, and make sure you let them know you are shopping for your best deal.

• While this process is time-consuming and can be somewhat annoying, ultimately it will pay off with your best rate, which could save you thousands of dollars a year in interest on your mortgage payment.