Getting the best deal

Getting the best deal

Over the years I have heard and seen many horror stories of people who have gotten burned in the mortgage market, either by not getting the loan that best fitted their needs or by paying too much for the loan they did get, or both. It has been my experience that the cause of these debacles is usually the borrowers dealing with a firm they have never heard of in order to get the lowest interest rate possible.

There are three things I want to point out that may not be apparent to those who do not deal with mortgage loans every day (which is just about everyone):

1. The difference in monthly payments between an interest rate of 6.5% and 6.375% on a $100,000 loan is $8.20. On a $200,000 loan, that would be $16.40. Money you would rather have than not, but is it worth an extra $1,000, or more, in closing costs up front?

2. All money that flows into mortgage loans from investors ultimately comes from the same place…the bond market. This is where most mortgage loans end up, and those loans that don't end up there are still priced as if they will end up there.

3. Finally, because the end product is money (as opposed to, say, a car or TV or jet ski), there are no "sales" in the mortgage market. You simply aren't going to find a thirty year fixed rate mortgage at 6% when everyone else has a rate of 6.5%, unless there is something else in the equation you don't know or understand, such as up front fees, pre-payment penalties, etc.

The key to getting to ending up with the best loan for you at the best possible interest rate is to deal with a mortgage professional that you know and trust. If you just get out the yellow pages and start calling mortgage companies to get rate quotes, or call one of the innumerable pop up ads you get on the internet, you are going to end up with the person with the best sales skills…not the person you want handling the largest financial transaction of your life.

Your accountant or lawyer would be a good place to start when looking for a referral to a mortgage professional.

Remember, in the mortgage market, if you don't know what you are doing, finding out can be awfully expensive…deal with someone you know and trust.

Carl Trawick is a Mortgage Specialist and Licensed Mortgage Broker with the firm Access e*Mortgage. He can be reached at 904-343-1145 or ctrawick@nefcom.net