Use calculator to compare mortgage rates

While you may be better off using your builder's preferred lender, do the math first. If you are going to save $2,500 off closing costs but it will cost you $5,000 more money to pay the higher real estate mortgage interest, then you will lose out. Ask a lender to help you figure out how much it will cost you in interest whether you choose a 15, 30, 40 or even 50-year real estate mortgage.

Real estate mortgage facts and figures

You can look online to compare a variety of lenders. You will need to know the rate they are offering, the points, the APR, how many days they will lock in the rate and estimated closing costs. In Minnesota, the rates have been hovering around 6.0 for the last year. A 30-day lock-in is fairly typical, and means the lender promises to give you the agreed upon rate as long as you close within 30 days. If you are building a home, make sure your home is close to being completed before locking in on a rate. Strive for a loan with zero points. Most lenders will negotiate the points as well as the interest rate.

Get pre-qualified for real estate mortgage

Whether you are buying a new or existing home, you should be pre-qualified for a Minnesota real estate mortgage before you go house shopping. When you get pre-qualified for a real estate mortgage you learn exactly how much you can afford. You also find out how much money you need to come up with as a down payment. If a bank feels comfortable you can afford a certain monthly payment, that's a good sign. But it doesn't mean everything. A bank does not know all of your spending habits. Be honest with yourself about what you can afford. Just realize a lower real estate mortgage will give you more buying power, which means you can afford a more expensive home. When it comes to comparing mortgage rates, it's probably the most important homework assignment you will ever do for yourself.