Did you know shopping for a home loan may save you thousands of dollars over the life of your loan?
Let’s look at an example, on a $300,000 30-year fixed rate mortgage the difference between a 3.25% rate and a rate of 3.5% means savings of $41 every month or $14,760 over the term of the loan!
But keep in mind you aren’t just shopping for the best rate. You want to compare the whole package.
Things to keep in mind:
- Pay attention to the fees
Pay attention to the fees charged by the lender, as well as the cost associated to buy down the rate (points).
- Look at the APR
A quick way to compare the overall cost of the mortgage is to look at the annual percentage rate (APR). The APR reflects the costs associated with taking out a mortgage on a yearly basis calculated based on the interest rate, lender fees, points, and other charges.
- Worried about how shopping will affect your credit score?
According to the Consumer Financial Protection Bureau, multiple credit checks from mortgage lenders are recorded on your credit report as a single inquiry within a 45 day period.
- Credit less than perfect?
Don’t let credit issues or unique scenarios stop you from shopping. You may find more options than you think.