The best mortgage rate wins - or does it?

When it comes to mortgage rates, the best rate wins - or does it?

If you are looking to get the "best rate" you need to remember that there are considerations outside of rate - AND EVEN OUTSIDE OF THE LOAN YOU ARE DOING TODAY - which could impact your situation and the amount of interest you pay. Let's look at an example:

1) Bank A has the BEST RATE available at 5.00%. They are great at customer service, and get you the deal you want. It was easy and you now have a nice low payment for 30 years. You didn't know the person who originated the loan, but they seemed okay based on the limited interaction you did have. According to all the information you know, you got the best deal for your situation.

2) Bank B has close to the best rate available at 5.125%. They provide good customer service and can get close to the deal you want. The monthly payment might be higher by $10 or $15 dollars a month - however, with this bank you learn that you can pay bi-weekly and actually turn your 30 year loan into a 23 year loan saving over $100,000 in interest payments. The individual from Bank B gets paid slightly more due to the higher rate - but he spends more time with each client learning how they can be helped (more than just a rate) and closes less deals each month.

So if you went with the best rate, did you get the best deal?

The key to any financial transaction is that you get a GREAT DEAL/RATE/PAYMENT - not just on the transaction today - but also over the course of your life. The "lowest rate available" may end up costing you more than you can imagine.

It is not easy, but you should think about the road ahead and less about your next step....after all, your next step may be in the wrong direction.