A mortgage comparison rate looks at the actual interest rate of the mortgage, and then takes into account some fees, like the application fee, possible monthly fees etc. You may see two home loans advertised with the same rate, but one of the comparison rates may be higher, as one of the loans may have a higher application fee or monthly fee. Lets look at two examples to see what I mean.
The both examples, we will look at a $100,000 home loan over 25 years, with the rate at 7.0%. One loan will have no application fee, and no other fees; the other mortgage will have a $700 application fee and a $10 monthly fee. In example 1, our mortgage has a rate of 7%, no application fee and no monthly fees over a loan term of 25 years. In this example the comparison home loan rate would be 7%, as there are no other application or monthly fees that would change the comparison rate.
If a commission is paid to the broker, this raises the issue of a possible conflict of interest, so you may not necessarily end up with the best deal for you. You may wish to educate yourself on the mortgage market before you start dealing with a broker, to help you comprehend his or actions, and any finance or mortgage specific language that they may use, that may otherwise not make perfect sense to you.
This is a good example of why it is important to compare the actual cost of a mortgage you may be interested in. At the moment, there are differences between each bank and lender, so a call to a mortgage broker to compare your current mortgage, may actually save you some money in the end.
Once you have identified a suitable deal, it is simple to apply for it. Simply select the deal that you are interested in and then complete a simple form, and the mortgage lender can then follow up if you meet their screening criteria.
The both examples, we will look at a $100,000 home loan over 25 years, with the rate at 7.0%. One loan will have no application fee, and no other fees; the other mortgage will have a $700 application fee and a $10 monthly fee. In example 1, our mortgage has a rate of 7%, no application fee and no monthly fees over a loan term of 25 years. In this example the comparison home loan rate would be 7%, as there are no other application or monthly fees that would change the comparison rate.
If a commission is paid to the broker, this raises the issue of a possible conflict of interest, so you may not necessarily end up with the best deal for you. You may wish to educate yourself on the mortgage market before you start dealing with a broker, to help you comprehend his or actions, and any finance or mortgage specific language that they may use, that may otherwise not make perfect sense to you.
This is a good example of why it is important to compare the actual cost of a mortgage you may be interested in. At the moment, there are differences between each bank and lender, so a call to a mortgage broker to compare your current mortgage, may actually save you some money in the end.
Once you have identified a suitable deal, it is simple to apply for it. Simply select the deal that you are interested in and then complete a simple form, and the mortgage lender can then follow up if you meet their screening criteria.
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