While shopping for a mortgage, 

it's common for people to focus on getting the lowest possible interest rate. After all, a lower rate can result in significant savings over the life of a loan. Rates change daily based on the strength of the economy. When the economy is strong, the cost of borrowing increases, and when it's weak, rates dive lower to incentivize borrowing. A difference of even half a percentage point can result in thousands of dollars spent over the term of the loan​1​.

However, focusing solely on the interest rate might not provide the full picture of what a mortgage will cost. The mortgage program you choose can also significantly impact the total cost and terms of your loan. Different mortgage programs can have different fees, requirements, and benefits that could make one option more suitable than another depending on your specific situation.

There are several reasons why shopping for different mortgage programs may be more advantageous than simply looking for the lowest rates. Here are three key reasons:

Different Programs Cater to Different Needs

Mortgage programs are designed to cater to different buyer profiles. Some programs are specifically created for first-time homebuyers, others for veterans, and some for people with low to moderate incomes. By shopping for programs, you might find one that is specifically tailored to your situation and offers advantages that outweigh a slightly higher interest rate. For example, some programs might offer lower down payment requirements, which can be beneficial if you have limited savings.

Terms and Conditions Vary

Mortgage programs differ in their terms and conditions, which can have a significant impact on your financial situation over the life of the loan. Some programs might offer a fixed rate, while others might offer adjustable rates. In addition to the interest rate, factors like the term of the loan, the possibility of prepayment penalties, and the requirement for private mortgage insurance (PMI) can drastically affect the overall cost of the loan. Shopping for different programs allows you to compare these factors and find a loan that best fits your long-term financial goals.

Fees and Costs

Different programs can have different costs associated with them, including origination fees, closing costs, and ongoing costs like PMI. Sometimes, a loan with a lower interest rate might actually end up being more expensive when you factor in these additional costs. On the other hand, some programs might offer grants or credits that can offset these costs. Shopping for different programs allows you to get a more comprehensive view of the total cost of the loan, beyond just the advertised interest rate.

In conclusion, while interest rates are a crucial aspect of a mortgage, they are not the only factor to consider. Shopping for different mortgage programs can help you find a mortgage that is tailored to your needs and financial situation, and that may offer benefits beyond just a low interest rate. Always be sure to consult with a trusted Mortgage PRO, we call them PROLenders. A PROLender is the rarest of loan officers, that offer expertise on many solutions and a proven track record of closing loans with 5 star reviews around the country.

Key Tags: Mortgage Shopping, Home Buying, Mortgage Programs, First Time Home Buyers, Loan Terms, Financial Planning, Real Estate Investment, Homeownership, Down Payment Assistance, Mortgage Rates