Finding Lower Interest Rates
Nowadays, we can shop for just about anything on the net, so it is no surprise that mortgage rates are one of the items to be found on the net. How do you find the lender with the most advantageous rates?
As long as you have the time to devote to it, you can find a multitude of sites to shop for rates. They all pretty much work in the same manner, however; they gather all of the quotes from banks in your areas and, in an automated way, post them to the site.
This all seems just great, but there are some things to watch out for in searching these rates.
These sites only serve as databases, listing all the rates offered by all the banks in a certain area. They offer a valuable service in that your search is quick and easy, but this information is not exclusive to these sites-you can get them yourself by getting in touch with the banks yourself.
What you do have to be aware of is that the rates they quote are so low because they apply to the best risk, what is thought of as a prime borrower. Your rate is may be quite different, since your application may not be viewed as prime.
This phantom prime borrower that the best shown rate is offered to is a borrower with an extremely good credit rating, stable job history, few or no late payments and a good down payment. In each area where you as an applicant deviate from this perfect borrower, your rate goes up.
A lower credit rating, a short job history, and a number of debts that have been paid late will automatically mean that your rate will be higher than the best rate shown by that lender.
The idea is that you contact these companies because they have the best rates, but they really aim to receive your business so that if they process your mortgage, even at the higher rate, they will receive a commission. There is nothing wrong with this, and offering you the ease of finding rates and lenders is a good service.
The important issue is to find the site that will not just “shop around” for the best rate for you, but also have the ability to advise you about the right kind of loan you should look for.
Deciding between a fixed or adjustable rate mortgage, between balloon or traditional payment term, etc., is difficult and usually the area where borrowers need the most advice. This kind of guidance can really only be obtained from a mortgage consultant, who is able to do an analysis of your situation and recommend the best loan solution for you.
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