Answers to Questions About Today's Mortgage Rates and Home Loans

With all the media stories about mortgage lenders, is this really a good time to be shopping for a mortgage?

This is an excellent time. 30-year mortgage rates recently hit an all-time low; until this year, mortgage rates had never dropped below 5%. Especially if you've maintained decent credit, the market today will reward you with the lowest mortgage rates in history.

If mortgage rates are so low, do I need to shop around or can I just get a low rate from anybody?

It depends on whether you'll settle for average rates, or if you want the lowest mortgage rates available. Over the course of a 15 or 30-year mortgage, little differences in rates add up to big dollars.

What are some tips for comparing mortgage lenders?

The most important thing to remember is the expression "apples-to-apples." When you compare mortgage lenders, make sure you are lining up the exact same thing for each one. That means the same loan length, the same type of loan, and use APR figures that factor in fees on top of the stated interest rate.

Should I be looking at fixed or adjustable rate mortgages?

Look at it this way--if mortgage rates are at or near all-time lows, wouldn't you want to lock that in with a fixed rate mortgage? You can look at it another way--assuming you can afford a home loan at current rates, why would you risk having payments increase in the future? There are special circumstances in which adjustable rate mortgages make sense, but when in doubt, lean toward fixed rates.

What about mortgage refinance--is this a good time?

It depends on your current mortgage rate, but given how much home loan rates have dropped over the past couple years, there is a good chance you should refinance. It's at least worth running the numbers on a mortgage calculator.

What if I want to wait--will these rates still be available in six months or a year?

Perhaps, but history suggests the odds are against you. If mortgage rates are setting record lows, do you want to gamble on that continuing?