The best deal is not always the lowest rate

Mortgage clients constantly want the best rate. But the lowest rate does not always mean the best deal. In shopping for a mortgage don’t forget the extras. Extras include:

• Low prepayment penalties

• Generous pre-payment privileges

• Cash back

• Cash back clawbacks

• Free home warranties

• Professional mortgage planning

• Low lender fees (if applicable)

• Portability

• Missed payment flexibility

Clients are attracted by even a 0.10% savings in mortgage rates.  But when you do the math, the relative importance of the “extras” become clear. A 0.10% savings on the typical 5-year $250,000 mortgage equates to:

A difference in monthly payment of only $14 and a savings of just $387 over five years on your mortgage balance. Just one of the extras above could offset this 10 times over.  Something to think about the next time you are mortgage shopping.