You get what you pay for

The question that I begin all of my meetings with is, "Which is more important, low interest rate or lowest cost over time?" If you don't have a solid answer to this, it may be an indicator that you need to spend some quality time with someone who understands finance and can take a look at your overall financial health.

Many times people will make a decision solely based on interest rate. Why? Because someone that they trust said that rate is the only indicator you need to be weary of in mortgage shopping. Several times in my career I have seen people who made decisions based on someone elses criteria. You need to evaluate what is best for you and your future. Everyone is different. Frequently, people desire the best rate on the wrong scenario, which can be very costly in the long run. This may lead to an unnesscessary refinance, late payments, loss of equity, prepayment penalties, and possibly a forecloseure.

Do yourself a favor. Never make a decision solely based on rate or lowest cost. Do some research. Ask a lot of questions. Wait for the answers that you are comfortable with. Ask for references. Quicker isn't always better. Do business with someone you trust. If it sounds to good to be true, it probably isn't.

Good loan officers will uncover all the concerns of the loan and have solid answers to your questions. They should be able to identify your needs and provide sound financial solutions.

If you do go with the lowest cost, you will likely have to absord several unexpected costs. Costs like; expired rate, changed in loan terms, extension fees, change is product, faulty approval, increased rate to close, loss of earnest money, etc. Think about what you paid for your vehicle. If someone was trying to sell you your same vehicle for a third of the price, what would be your response? That is right, What is wrong with it? It is the same with mortgages, if the costs and rate seems low, you might want to ask a few more questions. There is a cost of doing business, you just need to be able to justify what is worth paying for. The right loan at the right cost over time.