Lowest Rate (Price) Vs. Best Product…Which Do You Choose?

By September 11, 2012Mortgage News

Normally when we receive telephone calls from new clients, the first question on their minds is “what is your best rate?” Although rates are very important, how many of us pick up the phone and call a car dealership and ask them the very same question “what is the lowest price car on the lot?” Most of us would never dream of doing this as we first need to get to the car lot and start “kicking tires”, taking a few cars for a test drive, lifting up the hood to check out the motor, and then carefully going over every detail of the car well before we start negotiating over the price.

Why then do most folks seem so unconcerned about the mortgage they are getting into and seem only interested in the best rate? Perhaps most believe that all mortgages are the same anyway. In some cases, this is a true statement. Most lenders provide similar pre-payment privileges and allow for weekly, bi-weekly, or monthly payments.  The majority of lenders will allow you to port your mortgage to another property in the event you sell your home and move to another location. So what’s the big deal if most lenders offer similar benefits and privileges?

In actual fact, not all lenders and products are the same. As an example, a normal conventional mortgage does not allow you to re-borrow any of the principal that has been paid down over time without incurring new legal fees, appraisal, etc. A re-advanceable mortgage allows you to re-borrow up to your original balance or limit that you started with at no cost! This one feature alone is worth thousands!!! Let’s talk about portability now. Some lenders require you to port your mortgage on the same day while others allow you up to six months. This can be the difference of having to pay not only a mortgage penalty but lose your existing rate as well. Finally, some lenders offer the best rate AND the best features which makes the decision even easier to make.

In conclusion, it’s important to do some comparison shopping but not to exclude checking out the features and benefits of what mortgage you eventually settle on. Our commitment to you is to assist you with this process and ultimately being able to make a wise decision. If you’re shopping for a mortgage, give us a call and we’ll start “kicking tires” with you.