The lowest mortgage rate is a relative term. The lowest rate that you qualify for in your home may be different than the lowest rate that your neighbor qualifies for with the exact same home. The lowest rate may not provide you with the lowest possible payment. A 15 year fixed rate loan will have lower rates than a 30 year fixed rate loan, but your payment will be lower when the loan is spread out over the 30 years. In the mortgage industry, conforming mortgage interest rates are considered to be the lowest interest rate possible. Conforming loans have one set of qualifying guidelines. In order to get a home mortgage with the lowest interest rate, loan applicants must qualify with acceptable Debt-to-Income Ratio, credit history, property type, residency type, Loan-to-Value Ratio, asset reserves, employment history, etc. Borrowers are penalized with a slightly higher interest rate with each qualification criterion outside of the conforming guidelines.
Just because a mortgage professional quotes an appealing interest rate, it doesn't mean it is the best deal available. If you are rate shopping and the rate is lower with ABC lender than with the majority of other lenders, make sure you pay careful attention to the fees that are being charged. Sometimes lenders will offset the lower interest rate quotes with higher closing fees. Keep in mind that these fees should not be confused with paying discount points to buy down the interest rate.
