When it comes to finding a great mortgage rate, it’s easy to think that the lowest figure should win. After all, paying a lower interest rate should mean saving money, right? Well, not necessarily. Instead, it’s important that those seeking the best mortgage rate should compare the rate versus the features. A low rate with no features is going to be less valuable than a higher rate with all of the bells and whistles.
Among the most important features mortgage rate seekers should focus on are the pre-payment options and the penalty costs to break the mortgage. If the penalty to break a mortgage is severe and mortgage lenders do not provide any pre-payment options it should be viewed as a red flag. After all, paying off your mortgage early should not be penalized.
Other features that should be reviewed with a lender is whether or not there is a line of credit associated with the mortgage. This can greatly increase the value of the mortgage and give more repaying options.
Mortgage experts know that low rates are only as good as the lenders providing them. This is why lenders should be vetted. Consumers and potential borrowers should find out more about the overall reputation of the lenders and consult customer reviews to confirm whether or not there are concerns or praises.
In conclusion, finding the best mortgage rate should be as much about the lender and the features as it is about the rate itself. Looking at rates in a vacuum can provide an inaccurate and potentially problematic assessment of the value of the mortgage. Identify your priorities and evaluate the lender in addition to looking at the « numbers » and this will help you to identify the best mortgage rate for you.