How to get the Lowest Interest Rate Possible! Written by Carey Gray

Where to Shop

Whether you are looking for home equity loans, home loans, FHA mortgages, first time buyer, or obtaining mortgage financing quotes where you shop is important.  I tend to lean toward nationwide home mortgage loan companies due to their vast resources thus obtaining the lowest rates available for first time home buyers, refinance, home equity loans, etc. whether you use DirectLendingPlanet.com, mortgage financing quotes can be obtained through direct lenders.  Use mortgage calculators to compare the best offers you receive. 

Shopping the lowest rate is the first step.

Know your credit scores ahead of time! Do not let brokers pull your credit scores or believe them when they say they need it to give you a rate!   

Don’t get caught up in only in only shopping several bank/brokers this because the brokers and banks know the majority of borrowers are looking at several lenders. They tend to give you a good rate but not the best!   Also beware of no closing cost offers although on paper they may appear good they ALWAYS have higher rates in the long run. Some are ARM products and some just have a higher rates  if to day for example I look at the lowest rate I will see about 5.875% rate on 30yr fixed.  Now the no closing cost options out there (I’ll pick the best rate I see) is 6.250%!  Understand the no closing cost option is good for borrowers refinancing and not enough equity to cover closing costs this is why the program was started!  It is unfortunate that so many borrowers got caught up in the marketing!  NO closing cost loans for borrowers able to pay closing costs are a no win situation.  The fess come from somewhere and you pay them one way or another!

Should I buy down the rate!

I prefer this option in conjunction to the others for one reason.  If you buy down the rate even if it’s only a slight buy down, the brokers and banks cannot charge you yield spread.  This gets you the absolute lowest interest rate available. They can’t get money from the bank for charging you discount points thus forcing them to only get paid the broker fees.  The fact is this is a good option if you plant to stay in your home for more than 3 years and not refinance!  The reason often will encourage borrowers to do this is simple if you can save ½% only on a 250k home loan you save $37,500 in additional interest over 30 years.  The cost to buy the rate down ½% generally speaking is no more than 1% or $2,500 Now consider a large majority of your interest is paid over the first 10 years and it becomes clear!  Would you pay $2,500 once to save $37,500?

The final strategy is simple

I often tell clients to shop and find the best rate they can and come back to me with their best offer and we beat it!  www.DirectLendingPlanet.com this company is the only company I know of that does not raise interest rates to get paid yield spread!  They consistently have the lowest rates Available!

WARNING!  Do not let any broker tell you he needs your SS# to give you a quote!  I tell every borrower to pull their own credit report it is free at WWW.Freecretidreport.com knowing your scores prevents brokers from pulling your credit report Willy Nilly!  Yes it is true that you have about 30 days after a mortgage company pulls the first report to make a decision.  But it takes more than 30 days to close most loans!  You must wait for approval subject too Appraisal then title etc.  This takes time. They typical appraisal takes 7 days then the title company has to look it over and do title searches.  The approval is always subject to these things happening and being positive then the lender pulls your credit! Then and only then can a loan close!

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