How to Find the Lowest Mortgage Loan
Check your credit report at all three major credit reporting agencies: TransUnion, Experian and Equifax. You can get a free copy of your credit report from all three agencies by going to the Annual Credit Report (see Resources) and following their instructions. Review your credit report carefully and report any errors you find to the appropriate agency.
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Use online mortgage calculators to find the amount of your mortgage payment at different interest rates and loan terms. Use the prevailing lowest mortgage interest rates if you have excellent credit; otherwise, use a higher rate of interest in your calculations. Use the estimated payment information to determine whether a 15- or 30-year loan is best.
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Visit the bank or credit union where you have your checking and savings accounts and ask to speak to a mortgage representative. Be prepared to provide as much financial information as you can, including copies of tax returns, pay stubs and other documents you can use to prove your income.
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Contact other banks and credit unions in your area, as well as online and Internet banks if you're comfortable dealing with a nonlocal mortgage provider. Compare the quoted rates you receive with those of your local bank.
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Check the rates at mortgage brokers as well as at banks and credit unions. Mortgage brokers compare the rates from different lenders and can sometimes provide a lower rate than you could find on your own.
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Read the fine print on the mortgage paperwork carefully. If you don't understand any terminology, ask for help from a trusted source, such as an attorney or a government agency charged with helping first-time homebuyers get the best deal. Watch out for teaser rates, artificially low rates that revert to market levels after just a few years. If the interest rate on your mortgage goes up, so will your monthly payments.