There are a number of ways to find the best mortgage rates, but all require a little bit of work on your behalf.
The key to all the methods is shopping around, since you can’t really determine if a mortgage rate is good without comparing it to others.
Try a Mortgage Broker
Sure they’ve taken a lot of flak lately, but if you work with a mortgage broker, you can have them shop your loan scenario with a number of banks and lenders to find the best rate.
They have access to wholesale mortgage rates, which generally price below retail rates, so you might end up with a better deal.
And brokers do the work for you, so you don’t need to shop yourself – just make sure you find a reputable broker to work with first.
Comparison Shop Online (and Offline)
If you want the best mortgage rate, shop around. Get quotes from mortgage lenders online and inquire about rates with your local bank(s).
Just be prepared to get bombarded with phone calls and e-mails from interested parties looking to sell you the best rate.
They’ll probably lay off after a few days (or weeks), but the more you shop, and the more you tell others about yourself, the more you can expect to be contacted, sometimes relentlessly.
Zillow’s Mortgage Marketplace
Assuming you still want to shop around after those words of warning, consider using Zillow’s Mortgage Marketplace, which allows you to shop for mortgage rates anonymously.
You simply fill out a rate request and the lenders pitch their offers to you – just watch out for bait-and-switchers once you’ve made contact.
In summary, be sure to look beyond the mortgage rate itself – fees (loan origination fee, mortgage points) can add up quickly and greatly distort the mortgage rate you ultimately receive.
Tip: If the lender lists the mortgage rate along with the APR (which includes certain fees), find out exactly what fees are included in the calculation and which are not. All are relevant!
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