Shopping for a Mortgage
January 8, 2009 – 2:40 pmWelcome back!
For many people, the search for a mortgage can be overwhelming. You often must compare a variety of loans with different interest rates and terms to find the best mortgage for you. Miss out on the best deal and you could be stuck paying thousands of dollars in extra interest over the next 15 to 30 years. Bear in mind that in the early years of a mortgage, the bulk of your mortgage payment is going toward interest. In successive years, more and more of your payment goes to pay the principal. How much do one or two percentage points matter for a mortgage? Check out the table below.
The internet can help you figure out how large a mortgage you can afford to where to get a loan. For instance, the sites www.internet.com and www.mortgagenet.com are great for learning what your monthly payments would be for different types of mortgages. You can get timely data on mortgage rates in your area at the Web sites www.hsh.com and at www.bankrate.com. Such services may also notify you if mortgage rates have risen or fallen since you last checked in. these days, roughly 80% of lenders with Web sites will let you know how large a mortgage you are likely to qualify for; these prequalification programs don’t guarantee that you’ll actually get the loans, though.
MONTHLY PAYMENTS FOR A 30-YEAR FIXED MORTGAGE
MORTGAGE
AMOUNT 7% 8% 9% 10% 11% 12%
$50,000 $333 $367 $402 $439 $476 $514
$100,000 $665 $734 $805 $878 $952 $1,029
$150,000 $998 $1,101 $1,207 $1,316 $1,428 $1,543
$200,000 $1,331 $1,468 $1,609 $1,755 $1,905 $2,057
$250,000 $1,665 $1,835 $2,013 $2,195 $2,381 $2,573
$300,000 $1,997 $2,203 $2,415 $2,633 $2,857 $3,087
$350,000 $2,329 $2,568 $2,817 $3,073 $3,335 $3,601
$400,000 $2,663 $2,937 $3,219 $3,511 $3,811 $4,115
To begin the mortgage process, ask your real estate agent to recommend some lenders and see if your friends have used local lenders. Your agent might also be able to direct you to a mortgage broker, a kind of clearing-house for home loans (for more on this, see “Smart Strategies for Buying a House, Condo, or Co-op”). Also, find out from your agent if any firms publish lists with data on mortgages offered by lenders in the same area. For example, every week HSH Associates puts together surveys of loans offered by 25 to 80 lenders in most states (800-873-2837). Cost: $18 for two surveys. If you can’t find such a list, check your local paper’s real estate section for advertisements to give you a sense of the mortgage market in your area. Then call a half dozen or so lenders to find out their current rates and terms.
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10 Responses to “Shopping for a Mortgage”
Thanks for this helpful information. I’m in the market to buy my dream home this year and I’ll take all of the help I can get! I’m just about out of my credit debt and am saving as much as possible. I’ve also started researching Taylor Morrison (http://dreambig.taylormorrison.com/?utm_source=bc) because they offer incentives toward buying your dream home. They’ve helped me along the whole purchasing process. Hopefully I’ll move in this summer!
By
nadia (Who am I?) on Jan 8, 2009
Just a heads-up: this is a VERY old article. While the advice to shop for a mortgage is still sound, at least half of the websites noted are gone. (And the payment table only goes down to 7%, while rates are averaging about 5%.)
HSH is still here — our 30th year — though our prices for lender surveys are somewhat changed. (And, we appreciate the mention.)
If you’d like some current content — including graphics and RSS feeds — visit HSH.com.
By
Paul Havemann (Who am I?) on Jan 8, 2009
Hi Paul,
thanks for the feedback. Would you like to give us newer data on this? I can’t seem to find this on your website. Got this from google search.
thanks!
FMPF
By
moneyexpert (Who am I?) on Jan 9, 2009
I’d like to throw a suggestion in…
Check out SmartHippo.com (where I work) for finding a lender. It’s an online shopping comparison site for mortgages that uses consumer reviews and feedback to help you find a reputable lender in your area. (And it’s free and anonymous for consumers)
By
Kelly Rusk (Who am I?) on Jan 14, 2009
I’d like to say that mortgages can be confusing. Why people would want to pay on interest first is beyond me. The good thing is when the value of the house goes up more than the interest you are paying. Buy a foreclosure and then get your dream home.
By
Debt Free Hispanic (Who am I?) on Feb 4, 2009