How the Mortgage Payment Calculator Will Help You To
Really Shop For The Best Mortgage Rate

By Roger J

When shopping for a mortgage and looking for the best rate the tendency is often to just look for company's published rates and call the company claiming the lowest or call around and just ask 'what is your rate'. Unfortunately this will often not lead you to the best rates and can often lead to unpleasant surprises later.

This is because there is no single rate offered by a bank or mortgage lender on a given program, but rather a range. Where you actually fall in this range depends both on your personal financial circumstances and the property that you are purchasing.

What influences the rates the you will actually be offered:

Credit Score
Level of documentation you can provide
Whether or not you will pay 'points'
When you will close on the loan
Adjustments based on your circumstances and the property

Using this Mortgage Loan Calculator or pick any other that's more appropriate for you by clicking on the link.

Credit Score
Clearly if you have a 550 credit you will not receive the same interest rate as someone with a 740 credit score as you pose a higher risk to the lender. However, in your quest for the best mortgage rates, and consequently lowest mortgage payments, you also need to avoid having your credit pulled multiple times as this could lower your score causing your interest rate to go up before closing or even mean that your loan is denied at the last minute if credit is re-pulled. Some unscrupulous or inexperienced loan officers will tell you this does not happen. But it does. The best way to approach this is to get a copy of your credit report for yourself from a reputable source and use that to shop around. Only once you make your decision on which lender you will actually go with should they pull your credit.

Points VS No Points
Points are equal to 1% of the loan amount. These points are sometimes paid as part of closing costs in exchange for a lower rate. Keep in mind they affect the real total cost of your loan. It is generally your choice whether you pay points and can opt to pay more or fewer to obtain the rate that you want. Refer to the trusty mortgage loan payment calculator often to figure out the effect of variations in interest rates on the payment.  What you are offered will depend on how much money you have on hand for closing costs. The rule to remember is that the longer you plan on staying in the home the more sense it makes to get the lower rate.

Adjustments
These adjustments are also known as 'Bumps' in the industry. When talking to a loan officer make sure they have accounted for all factors to ensure you do not get any nasty surprises later. These adjustments can both be positive and negative.

Some factors that cause adjustments in rates:

Property Type
Loan Amount
Loan Purpose
Loan-To-Value
Term Of Loan
Type Of Loan
Credit Score
Documentation Level

Locking In Rates
Make sure you know how long the quoted rates are good for. Ask what the costs or fees are involved for locking in a rate. If you decide to lock in an interest rate make sure you get confirmation in writing and give yourself longer than you need in case any delays come up.

An increase in interest rates could have the kind of affect on your mortgage loan payment that could push you outside the calculated debt ratio used for the specific program. 

The Best Way To Shop for the Lowest Mortgage Payments
The best way to shop mortgage deals, and keep your mortgage payment in check, is to get a quote from one company and then use that as a comparison to others. Remember the more details you give to a loan officer the more precise they can be with your quote and the more accurate it will be. This not only means credit and property information but details of your employment, income, assets and mortgage history as well. This is easier if you put all your documentation that you will need into one folder or at least type all the important information into one email that can be used again and again.

Ask the loan officer not only for a rate, but a Good Faith Estimate of all the costs and fees involved as well. If you will be comparing different loan types then ask the loan officer for a separate quote on each one. Make sure you are comparing apples-to-apples and that each lender is quoting you based on the same information and keep referring to the mortgage loan payment calculator to confirm numbers.

After getting the best rate you will also want to most likely negotiate fees and other costs if possible. Be reasonable, but make sure you are getting the best deal possible. Mortgage quotes can be confusing, so at least give the loan officer from each lender the chance to explain it and offer you a better deal to match any competition.

See the full list of tools offered that cover almost every conceivable calculation: mortgage payment calculator

Good Luck & Happy Low Mortgage Payment Shopping!