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Mortgages & Refinancing

Lock in a Cheap Mortgage Rate

The path for finding the best mortgage rate means going beyond the first offer. See how to shop for your best interest.

1. Compare apples to apples. Choose the size of the loan you want; the type, either fixed-rate or adjustable (with an initial fixed-rate period of one, three, five or seven years); and the term (either 15 or 30 years).

2. Go to to find the day's best "par" rate (similar to a carmaker's dealer price) for the loan you want, exclusive of commissions or fees. Use it as a baseline.

3. Call lenders, beginning with the company that originated your current loan. Start just after 11 a.m. eastern time, when lenders typically issue their daily rate sheets. Complete your calls within as short a time as possible because lenders may adjust prices later based on market conditions, says David Reed, author of Mortgage Confidential: What You Need to Know That Your Lender Won't Tell You.

4. Know your costs. Reed says the annual percentage rate can sometimes be confusing. So ask each lender to break out the interest rate, the number of points youÕll have to pay, plus any lender or broker fees.


5. Lock in your rate. Get it confirmed in writing via e-mail or fax ASAP.

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