Are you thinking about Buying a Home and want to get the best mortgage payment? Want to make sure you are getting the best interest rate on your mortgage?  Well finding the best rate is not always finding the best deal.

Whenever you make a big purchase, it's always a good idea to shop around. There are hundreds of financial institutions wanting to give you a mortgage. If we hear about the Fed dropping the rate and the Fed Rate seems to be controlled by this one person (or government committee) then why can one mortgage company have a rate of 6.0 and another have a rate of 6.5?  Well, everyone is out to make money (there is nothing wrong with making a reasonable profit) but what sounds like the best deal isn't always the best deal.

There are two things you need to look at when shopping for a mortgage: rate and fees (fees typically run 3-5% of the loan amount but some can be really high).  If you are looking at 2 companies and one is offering a rate of 6.0% and the other company is offering a rate of 6.5%, then the first company is probably charging you more fees than the company offering 6.5% rate. 

Fees equate to cash out of your pocket at closing.  A higher rate means you pay a higher monthly payment.  So, you are either going to pay the money today, or over the life of the loan.

So with all these fees and rates it is hard to compare apples to apples.  That is where the APR comes in.  The APR takes into account the amount you are paying in fees along with the rate.  The lower the APR the better the overall deal.  So if you are calling around or checking out rates on the internet - look for the APR.

If you would like any information about buying a house in the Hoover, or Greater Birmingham Alabama area, please contact me at http://www.tonibird.com/.