It seems as if interest rates have become a bragging point for many Americans.
"My credit card has a rate of under 10%. "
"My student loans are at 3%. "
"We got into a house for 5.25%. "
"I have zero percent interest on my new vehicle. "
The first thing to do to find the best interest rate is to not listen to those around you who brag about their interest rate. You don't know what type of loan they have. You don't know the terms. You don't know the details.
You can't compare apples and oranges. It is hard enough to compare the rates from various lenders. You have to be sure that you are comparing the same loan to the same loan.
Start with deciding, without looking at interest rates, which loan program is right for you. Don't even ask about the other programs. If you know that the fixed-rate mortgage at a 30-year term is perfect for your family's finances, don't ask about adjustable rate mortgages. Decide what you need and then start comparing.
When a lender tries to tempt you into a riskier product at a lower interest rate, such as a Payment Option Plan, don't even write down the numbers. Simply tell them that you are not interested. What the lender is counting on is that you will compare the fixed interest rate with the option payment interest rate and choose the lower rate, which is the option payent rate. They are hoping that you ignore the fact that it isn't the mortgage you are looking for.
You stopped comparing interest rates and started creating interesst rates. Don't let a lender talk you into a program that won't work for you based on the interest rate. Many homeowners who did this are starting to regret it as interest rates reset to levels well above fixed interest rates.
Make sure that you know what you are looking for before you start comparing. Ask questions. Find out what the terms for each of the loans. For example, one loan may be significantly under the rate of the other loans you are looking at. There will usually be a reason why. For example, the loan could come with a prepayment penalty. Be wary of any interest rates that are significantly lower than the rest.
Martin Lukac represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com , a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!