Getting the Best Mortgage Rate: Part I of V

For some strange reason, bragging about the lowest mortgage loan rate or the best refinance home mortgage loan rate takes on such status as how far one can hit a baseball, or how big the fish was. Maybe it tells everyone "look how smart I am at picking out the lowest mortgage interest rate!" or "yeah, I thought about locking but I knew home mortgage rates were on their way down so I waited." I’ve been at dinner tables and heard people, one by one, go around bragging about their low mortgage rate. It’s really weird. Did these people know something others didn’t? Of course not. Most likely they were lucky. Or maybe, in fact they did do a few things that, while not guaranteeing them the lowest market rate, certainly helped their chances.

The first thing in locking in the best mortgage interest rate is to not fog everything up comparing everything under the planet from the number of days to the Summer Solstice to the Construction Spending numbers released later this month. The biggest culprit in mortgage rate confusion? Comparing different loan programs.

Comparing mortgage interest rates from one mortgage lender to another is tough enough, at best. But trying to compare mortgage rates on multiple home loans, from multiple mortgage lenders, makes it even tougher. Face it, no matter what anyone tells you, identical mortgage loan programs from different home loan lenders are tied to the very same index. What makes one mortgage home lender different from another? If it comes to comparing the very same mortgage loan program, then there really is no difference, as long as you get the mortgage loan you wanted at the right mortgage price and at the right time. Mortgage Lender A looks like Mortgage Lender B when you go to the Settlement Table.

Before I get jumped on by mortgage brokers from different mortgage loan companies telling me about their great customer service, their Six Sigma program or maybe their Customer for Life attitude, I didn’t say there’s no difference between loan officers. There are maybe more differences in loan officers than there are stars in the sky, but their responsibility to you stops or starts, based upon how successful a career in mortgage lending they want to have. But again, that’s where you can be led astray. This column is about finding the best mortgage interest rate.

You have to decide, without a doubt, which home mortgage loan program is right for you. Period. Don’t go backwards and second-guess yourself. Decide and move forward. It’s perfectly advisable to have at least one or two Loan Officer Superstars offering advise as to which programs would work best, given your goals, but the very first key in getting the best mortgage rate is deciding on a program and sticking with it. One can never, ever, compare apples and oranges in the mortgage business. We have more apples, oranges, pears, peaches, kumquats, and grapes than you can imagine. And we do it on purpose.

For instance, you call mortgage lender A and ask them for their quote on a 20-yr fixed mortgage rate and they offer 5.75 percent. Let’s say you then call Mortgage Lender B and Mortgage Lender B knows they’re slightly out of the market (their mortgage rate is higher then the competition). So they’ll reply, "My 20-yr fixed rate mortgage today is at 5.875 percent, but let me ask you a question, how long are you going to stay in your home? Is this your first house? Will you live there for 20-years? Have you thought about a 5/1 ARM? Have I told you about our brand new Payment Option Plan?"

If the mortgage loan officer is worth his or her salt, they’ll have talked you into comparing other home loan programs, hopefully finding one with a better mortgage rate. With MOrtgage Lender B’s help, did you decide on a 10/1 Interest Only Mortgage Loan with the mortgage interest rate being much lower than the 20-year fixed rate mortgage? Bingo. Mortgage Lender B wins. And you didn’t call Mortgage Lender A back.

You broke the first rule of finding the best mortgage rate. Instead of "hunting," you went "fishing." Don’t let loan companies talk you into other mortgage loan programs after you’ve made up your mind. Sometimes it’s nearly impossible to get an apples-to-apples mortgage quote in the mortgage business. And it’s tough enough to nail the lowest mortgage rate as it is. Don’t muddy the waters with multiple choices. Stick to your game.

For more helpful mortgage tips on mortgage refinancing, home loans, reverse mortgages or a home equity line of credit, contact FreeLoanComparison.com today!

Last update: November 14, 2008