There is no real or definite way to guarantee that you�ve gotten the best possible interest rate on your mortgage. There is no database or website that is available that will show the general consumer a report or grid of each company�s offerings and the interest rates associated with their various programs. At best, your mortgage broker will have access to software and websites that show information similar to this, but access to that material is strictly limited to authorized dealers. This is the reason that choosing a mortgage broker who you trust, one who has an impeccable reputation and solid references, is so essential.
Obtain Offers From Several Lenders�
- Bad Credit OK
- New Purchase, Home Equity & Refinance
- Get up to 4 offers
- Short Application
Perhaps the only way to double check on the interest rate you�ve been offered by a lender or broker would be to simultaneously obtain other offers from various companies and brokers. Although this is not impossible, it is definitely time-consuming and potentially confusing. Keep in mind that, until a lender or broker is permitted to run a credit check and review your credit reports, they cannot make a firm or final offer for any of their programs. Keeping in mind that every inquiry into your credit profile can lower your score a few points, having too many inquiries could damage your chances of obtaining the best possible interest rate from the lender you finally choose.
Brokers Often Offer Higher Interest Rates
Another thing to keep in mind is that one of the ways brokers get compensated from lenders is by bringing in consumers who are willing to accept an interest rate that is higher than the lender�s minimum for a particular loan program. The difference in the rate increase is converted into commission for the broker after the lenders perform some calculations of their own, therefore it is even more difficult to know the true �best� or lowest interest rate possible when working with a mortgage broker. By going directly to a lender, however, will most likely result in a much better chance of getting the lowest possible rate on your mortgage loan, however that also means significantly more leg work on your part, as you are essentially acting in the capacity of the mortgage broker for yourself. Without the same experience, resources, and contacts at various lending institutions, you will be hard pressed to obtain the same information in the same time span.
Compare Your Interest Rate to That of the Norm�
Overall, there is no easy way to determine whether or not your quoted interest rate is the best that you can possibly get. One of the easiest, yet also the most generalized, ways of comparing your interest rate to that of the norm for your situation, is to seek out lenders published descriptions of their programs and the corresponding interest rates for those individuals who would qualify for those types of loans. The difficult part is trying to figure out whether or not your own situation would qualify you for that scenario.