I recommend working with a mortgage broker, as opposed to a bank or other lending service, Good Brokers not only know policies and histories of local lending agencies, but they know individuals within the different institution, and their knowledge and connections they will be able to get you the best deal possible. Find one whose commission is paid by the bank, it's one bill you should not have to foot.

Best Regards,
Alessandra Marx
alessandra@elikaassociates.com
http://www.elikaassociates.com

Your best bet is to do your research, find a loan officer who is desperate and has low self esteem. They will be more likely to give you a better deal.

Hello Stephan,

There is lots of good advice already given here, yet I'd like to really concentrate on getting a few different Mortgage Professionals referred to you by family, friends, co-workers, basically anybody you can trust. The best deal isn't about just the interest rate (though important) or closing costs (though equally something to take into account) but making sure you are dealing with a Mortgage Professional who is helping to put you into a good position not only now, but for your goals down the road. Personally, I wouldn't look at it from just the 'who is the cheapest' perspective...I'd much rather deal with somebody whom I trust in their experience, competence, & ability to listen and meet your short-term and long-term needs and goals.

Stephan, Very good question! The best way to find the best deal is to ask one or more mortgage lenders for a GFI (Good Faith Estimate). As soon as you get that get a list of other lenders you might like to try from your agent or simply look them up and immediately fax this GFI to them. I say immediately because if rates change then you might be comparing others to a rate no longer attainable, or no longer competitive.

The next thing to do is carefully lay these GFI's side by side and take out the closing fees that your lender has no control over. Appraisals, inspections, title company charges and escrows are all items that lenders have little to no control over and don't belong in the equation (the caution is that I've seen time and time again where someone was including these and one lender looked much more favorable than the others simply because they were estimating $200 for appraisals and $100 for inspections when other lenders were estimating $350 for appraisals and $300 for inspections)

Look at the lender base fees, points, table fees, funding fees and other fees that the lender directly charges. Then make your comparison.

Still, go with a reputable company. There have been many times when a client goes with a company that is out of town and, at the closing table, we find a nightmare scenario with fees much higher than were disclosed.

IMHO stick with lenders your Realtor suggests and other local lenders. If you're unhappy they will be impacted.

Good luck finding a great rate!!!

Chris Tesch
RE/MAX Bryan-College Station

I love this question... the best deal definitely sounds like you're shopping for rock bottom rates and closing costs. The problem with that is that you get rock bottom service as well.

Do you entrust the cheap guy with your finances?

Would you shop for heart surgery by the lowest cost?
Would you shop for the lowest cost for anything and expect the best product?

No... the best deal is the loan that fits your needs based on your Credit, Income and Assets ... not just now but also for the future.

Many loan officers will just write you any loan you want without even looking at the facts...which is one of the reasons why the lending industry is in such a mess...

the real answer to your question is NOT:

1) Get a no closing cost loan - where do you think the costs go?? they vaporize?? no... you'll get stuck with SOMETHING you don't want and it is usually a higher APR and long prepayment penalty. Lenders don't give things away...
2) run around town and tell people to give you the best rate/terms without getting some sort of prequalification with REAL information about you...

You need to find someone you trust and someone that comes highly recommended... someone that can help you through the steps.

Then you can the feeling of security that you're getting the best DEAL... Deal by the value of working with someone who is honest, truthful and lives a life of integrity....

a mortgage broker like that ALWAYS gives the best rates

I don't dop loans, but if you are comparing the same mortgage product (eg 30-year fully amortized), you might want each lender to give you a rate based on a no-cost loan.

In other words, ask each lender what rate would be charged if no points or fees were paid by the buyer (either up front or on the back end of the loan). All of those costs would be rolled into the loan, with a slightly higher interest rate being paid.

The elegance of a no cost loan is that if rates should drop, you may be able to refinance again without having those original fees and costs flushed down the drain.

In another life, I did loans and used this product exclusively. The mortgage broker is paid via a rebate from the wholesale lender.

This is not a simple cut and dry answer. You have many things to take in. Yes rate is important as well as closing costs. However, finding the mortgage professional who will be with you every step of the way including at your closing with you is the most important. This person must listen and understand your needs. Not just serve up a mortgage like a drive through. In this day an age you can always just type in their name on Google and see what turns up.

Hello Stephen

My name is Ernest Fraga and President of EF First Financial Corp. You need to communicate with an mortgage expert as the lending guidelines have changed dramactically this year. I offer customized financing solutions that makes sense, so you can feel secure about your real estate investment. Let me make a difference on your next purchase or refinance.

You may contact me directly at 786-299-6356 or Office Monday thru Friday at 305-222-1886 to answer any/all your questions.

Visit my website for information on loan programs and you can Apply On-Line.

Best advise is to call me directly with absolutely no obligation.

Thank you Stephen.

Regards,

Ernesto Fraga
Mortgage Broker / Realtor

At the risk of being chastised by fellow agents who perform both the duty of a real estate agent AND a mortgage broker I will answer this as I feel. I believe it is best that a person wear one hat only and be an expert at what they do. I believe my customers will be better served by getting their financing from a dedicated mortgage broker. I do not believe agents should be mortgage brokers nor mortgage brokers agents. They should keep to one thing in the best interest of their customers. Do not be afraid to ask questions and demand answers. Shop around and ask for referrals.

I see the same answers over and over again. The reality is that to get the best deal is not the same as getting the best rate.

You should be looking into finding a trsutworthy person that can get you the right loan for your situation. The best rate on the wrong loan program is far more costly than a higher rate on the right program.

Do your research and don't shop rate, shop expertise and value.

Definitely shop around; and don't be afraid to ask questions. Also, read reviews on the Internet. Ask friends, or people in the area. Word spreads easily whether it be good or bad - someone's reputation should not be too difficult to uncover.

Shop around or ask your Realtor which of their clients have been satisfied.