Coldwell Banker Residential Brokerage

Why It's Critical to Shop for Mortgage Rates

by Sherri Green 10/06/2019

Of course, you want to stay within your budget when buying a house. You certainly want value for your dollar. But a buyer should never lose sight of the fact what they truly desire is getting the home they want and that fits their needs. To that end, potential buyers may put in a “low-ball” offer on a house they truly want. They may risk losing a home that meets all of their qualifications by placing an offer that is five or ten thousand dollars less than a price the seller is willing to accept. What can be even more frustrating is that even if a buyer's offer is accepted by a seller, the buyer may just waste that money, or more, on the mortgage they acquire.

Buyers may be surprised to learn how much even a half of one-percent difference in a mortgage rate can make.

Example One

In our first example, after a down payment, a buyer gets a mortgage for $250,000 over 30 years at 4.5% interest. The monthly payment would be about $1,267 monthly. Over the course of 30 years, those payments would total $456,120. The net cost of the loan is $206,120.

Example Two

In our second example, we take that same $250,000 mortgage over 30 years, but the buyer compared mortgage rates and was able to find a lender offering that same loan at 4.0% interest, one-half of one-percent less. The monthly payment would now be $1,194, totaling $429,840. The net cost of this loan is $179,840. The difference between the two loans is $26,280. All because of a .5% interest rate difference. 

The Best Way to Save Money on a Home

Rather than chancing to lose a home you really like by making an offer that is too low, consider instead performing due diligence on mortgage rates. Seeking out a lower rate can be critical in saving you five, ten or twenty thousand dollars or more. That's a far better solution than losing a home you really wanted.

There are a lot of factors that go into determining loan rates for mortgages. These include the buyer's credit rating, work history, income to debt ratio and loan to value ratio. The bottom line is the better your credit the more options you will have in securing a mortgage loan.

One of the best ways to save money on buying a home is saving money on your mortgage rates. The best way to do that is by monitoring your credit rating and working to build it. When it comes time to buy a home, get pre-qualified and compare mortgage rates. You can even use an online calculator to compare rates on your own. Need further assistance in determining how to find the right mortgage for you? Feel free to reach out, and we can embark on your mortgage and home journey together.

About the Author
Author

Sherri Green

 "Your Property, My Priority"

As a resident of Charlotte for over fifty years, I've experienced the Queen city's transformation from sleepy southern town to a crown jewel of the South. Educating clients on the local market and all things real estate is truly a passion. I love helping people move into and around my hometown!

I understand that buying or selling your home isn’t a simply transactional event, it’s a personal one. Each client’s situation is unique, and communication is key in helping you realize your goals. I listen to your hopes and concerns throughout the process, tailoring a plan to meet your needs.

Previous clients have described me as resourceful and responsive—90% of my business comes from referrals. I’m always available to you, and take care to ensure you’re getting the most out of our partnership.

Buyers: My extensive knowledge of Charlotte neighborhoods and the surrounding communities helps hone in on areas that would be a good fit for you. Whether you’re a first time or seasoned home buyer, I have the experience and knowledge to find your perfect home.

Sellers: Positioning your property properly in the market is my specialty. With unparalleled marketing tools and attention to detail, I'll see you through getting your home prepared, pricing, marketing, negotiating and closing.

Relocation: Whether you’re relocating for work, or moving here because Charlotte is where you want to be, I can help. Moving to a new city is stressful, and I work hard to ease the burden, helping you find a new home and familiarize yourself with Charlotte.

Over the years I’ve been awarded Five Star Professional by Charlotte Magazine for several years running and Most Valuable Team Player, as voted by my peers. Being well respected as an expert agent in the area serves you well as I represent you in negotiations. A problem solver at heart, I’m adept at finding the right solution, whether it’s in financing, negotiation, or finding the right property.

More personally, I graduated with a BA in Communications from UNC Chapel Hill. I've raised four children with my husband, Bill, and have one granddaughter. Cooking, entertaining, reading and dining on one of Charlotte's many outdoor patios are some of my favorite things.

Call me, and let's get started!