Why Most Online Mortgage Rates Are Not Real

Online mortgage shopping gives you the benefit to search at your own pace and leisure, compare quotes from many companies without the pressure of commitment, and gives you plenty of time to make a final decision.

However, it is a well known fact that most of these online mortgage rates are not real.

The first reason for this is that the online calculations are designed to take into account the general public without any considerations to individual situations. When you deal with a real person, a greater amount of personal detail about ones financial situation is taken into consideration before giving a quote. Things like debt-to-earnings ratio, personal credit history, and other factors are taken into account. No mechanical online software can measure all these different factors to come up with the right quote.

The second reason online mortgage rates are off is that the final loan rate is going to depend heavily on the latest interest rates. Interest rates are normally very sensitive and cannot be guaranteed over long periods of time.

Also, many of the websites do not have real time interest rate tables, while others just use average rates across the country. This average may be very different from the actual rate for the area you live in.

The credibility of a mortgage lender can be judged from their record in helping people with bad credit, new interest they will charge you, and how much they are charging you on closing costs and the processing of the mortgage. Generally, this is between 5% - 10% of the mortgage value.

When dealing with a real person, the closing costs and processing fee can be negotiated to get a final accurate mortgage rate. The online mortgage rates have these values fixed, so the final rate you get online will not be accurate.

Down payment, household income, and credit history are the some of the major factors taken into considerations when quoting mortgage rates. If the credit history is not that great or the down payment is small, it does not mean that you can't get a loan - it just means you will have to pay more. How much more is a question open to discussion with a real person, and perhaps you can get him to give you a better deal through these discussions. An online search will just churn out a number with no room for discussion or negotiation.

The final problem with using online mortgage rates, is that many times they will base values on some special deals they are offering by cutting back significantly on the processing fee or closing costs. But by the time you make it to a real person and are ready to close the deal, you find that the special offer is no longer available and you have to pay more than the amount quoted online. This means you have to start your search all over! To save time and aggravation, just deal with a real person and get the right quote the first time.