How would you shop? There is so much information out there, where does one begin? Everyday different financial institutions and mortgage brokerages publish new marketing pieces to entice you to call them by appearing to have the “best rates”. The truth is, all the major mortgage brokerages have access to the same lenders, and, for the most part, the same interest rates.
What about your bank? Doesn’t it offer you a better rate because you have been a loyal client? Nope, not usually. In fact, with your own bank, you are likely to have to play the used car type sales game (no offence intended for the car folks) where they quote you a rate, then tell you to come back if you find a better deal somewhere else. That’s crazy! Why wouldn’t they offer you their best rate up front if they like you that much?
All the publishing of the best mortgage rates is merely a marketing strategy. Bottom line, the rates are very close to the same from lender to lender, broker to broker. And, the lender that is offering the “best rate” today, will be different tomorrow.
So what’s a girl to do? I’ll tell you the same thing I would tell people I love in my life. Rather than spending hours surfing the net, sit down and determine a life plan. Map out what you think will be important to you over the next 5, 10, 15 and 20 years. Consider things like, “When are we going to have babies? One or two incomes? Career changes? Do I want a starter home or do I plan to stay long term? How long? Will I want to build an investment portfolio with a real estate component? What am I prepared to change to have the home I want?” All of these factors will have a huge impact on your life. These answers should be foundational to any major financial decision, and getting a mortgage is one of the biggest ones you will ever make. Your mortgage can either facilitate your plans or totally derail them.
Ok, so you are asking, what does that have to do with interest rate? Not much. But it has everything to do with your mortgage strategy. I’ve done the math. I figure that the average family will spend about $750,000 on interest in their lifetime. Why? Because the financial industry has everyone so focused on interest rate, no one is asking about interest cost; except for me and a few others, and now perhaps you.
Yes, getting a great interest rate is important and any mortgage broker, agent or bank can get you one…if that is all you really want. Personally, I would demand much more for my loved ones. How about you?