Do The Right Math: Compare Mortgage Quotes Accurately

It doesn't matter how many times you trawl the Internet for information. When looking for tips on taking out a mortgage, you will always be given this advice: compare mortgage quotes. This is the first and most important rule for would-be homeowners. Always compare mortgage quotes. Unless you do, you cannot distinguish the good offer from the bad. Only when you compare mortgage quotes can you assure yourself that you are getting the best possible deal there is.

Comparing mortgage quotes, however, is not as simple as pitting one figure against another. You have to factor other things, too. At the same time, you need to have at least a working knowledge of the mortgage terms and realities you will be dealing with.

Tips for Comparing Mortgage Quotes

Below are some tips to ensure that your comparison yields as precise a result as possible:

1. If you want to make comparisons using very accurate data, get quotes from different lenders or brokers on the same day. Mortgage quotes change daily. At times, they even change several times in one day.

2. When you compare terms, compare mortgage quotes for similar lock periods. A lock period is the specific span of time that guarantees implementation of a certain rate. As a rule of thumb, longer lock periods have higher rates. Lock periods are generally offered in increments, like 15, 30, or 60 days.

3. Compare mortgage quotes that have the same points, such as zero or one. In the mortgage business, a point is the term given to a rate. Three points, for example, means three percent. Mortgage quotes follow a tiered pricing. This gives you the opportunity to buy the rate and bring it up or down. How? It's very simple. To make the points decrease, increase the mortgage rate. To make the points increase, reduce the rate.

4. In the quote you ask for, ask that the quote loan be separated from associates fees. Property taxes, home insurance, and pre-paid interest are not lender's fees. What falls under lender's fees are the following: standard title, appraisal fees, and processing or underwriting charges.

5. Compare mortgage quotes of the same type. There are many types of mortgages. There is a buy-to-let mortgage. Then, there are also self-build mortgage, right-to-buy mortgage, and reverse mortgage. The terms of your mortgage could change along with the type.

Things to Watch Out For When Comparing Mortgage Quotes

1. Locks of 45 days or more have a higher rate.

2. If lenders are asking you to pay points on the loan, be sure to have them quote the points in dollars. This is for your protection. Unscrupulous lenders might later on change the base amount to collect more from you. This is because points are computed as percentages. The bigger the base, the higher the commission, for example.

3. Beware of lenders that are not upfront about the loan process to you. A trustworthy mortgage company is always willing to answer your questions and explain points of misunderstanding.

Comparison is good because it highlights the defects of one and showcases the suitability of another. All the websites that dispense mortgage tips will always tell you to compare mortgage quotes.