How to find the cheapest mortgage

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Buy a mortgage from a variety of lenders, including banks; mortgage broker; Online creators such as accelerate credit; and aggregators, like rental tree. Visit their websites and fill out preliminary forms to get interest rate estimates instantly, or call company representatives who can quickly get quotes for you. You can also go bank rate to compare mortgage rates and find the best deals.

We quickly found cheaper interest rates at various banks. Bankrate’s average mortgage rates, collected from more than 100 banks, averaged 4.88 percent, but with an online mortgage broker morty advertised a 30-year term loan with an annual percentage rate (APR) of 4.285 percent. Wells Fargo offered a 30-year fixed-rate mortgage with an APR of 4.625 percent. (Freddie Mac, the quasi-government agency that buys and bundles mortgages and sells them to investors, put up the current average 30-year fixed rate a little under 5 percent.)

Another option is to find a phone number on the lender’s website and call them directly. We’ve found that you can get fairly accurate estimates over the phone. If you want an offer that could result in a firm offer, you must provide the lender with your social security number.

Before you start looking for lenders, decide what type of home you are interested in and what type of mortgage you want. You must also tell the lender where you are in the process. Are you just starting out buying a home or do you have an accepted offer or signed contract?

Once you start completing loan applications, you will be expected to review many aspects of your financial and personal life. Make sure this part of the process goes smoothly by having all the important paperwork on hand. Refer to Zillow’s checklist from what is normally required.

Ask any lender about a float-down option on your mortgage, says Keith Gumbinger, vice president of HSH, a mortgage information website based in Riverdale, NJ. With this option, if interest rates fall, your mortgage rate will decrease before closing—even if you’ve already locked in the rate. Although the feature usually requires a fee — maybe $500 — it can save you big when interest rates fall. “Float downs aren’t uncommon, but people have to ask for them,” says Gumbinger.

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