ForeclosuresMass - ForeclosuresMass Monthly - Debbie Siegel's Mortgage Minute - The Secret Behind Mortgage Rate Charts (August 2007)

A common theme of this column is the importance of understanding how a mortgage rate significantly impacts your bottom line; understanding your financing choices is only half the battle. This month I wanted to discuss the mortgage rate chart that appears in most weekend newspapers.

You can find the mortgage rate chart in the real estate section. It looks much like other financial indexes, with listings of various rates and fees from different lenders. There's one significant thing most people don't realize: to help consumers make choices.

Provided to the newspapers by a third-party company, the mortgage rate chart lists the company's clients who pay for the listings. This is disclosed, of course, but in very fine print. If you do read the fine print, you'll also notice that some of these rates are based on the purchase of a single-family home with 20% down, that some of the really low rates require more points to be paid at closing, and that some of them have even expired!

* Next 37 17 investors only!

Instead of being helpful, the mortgage rate chart makes comparing rates among lenders extremely difficult and confusing. Furthermore, since most of these rates aren't actually available to the average real estate purchaser, it adds an extra layer of uncertainty and anxiety to an already complex financial transaction. How can you be sure you're really getting the best rate for your situation?

The answer I always give people who ask this question is always the same: contact your financial professional. In particular, mortgage professionals are knowledgeable about a variety of currently available loan programs and can help you sort through the complex maze of apples-to-oranges that are the advertised mortgage rates and make sense of what you're seeing.

Choosing your mortgage product and its rate is one of the most important decisions you'll make in the real estate process (second only to purchasing the property, of course!). Instead of relying on the mortgage rate chart, conduct your own research by calling lenders. If you have questions about their products or rates, don't be afraid to ask!

Got questions about real estate financing? Contact Debbie@westchester-mortgage.com or 617-965-1236. She'll consider them for inclusion in a future column. Debbie Siegel is president of Westchester Mortgage in Newton, Mass. She is licensed in several Northeastern states.