Mortgages are not commodities. If you think “it’s all about the rate”, you are going to be disappointed from the start. It’s really about finding a trusted partner help you navigate a complex transaction by offering honest advice and responsive support throughout the entire loan process.
Online is not the place to transact your biggest liability. Buy a music player, bid on sports equipment, order some books, but don’t do a mortgage over the internet. There are too many variables that arise throughout the process. This is not to say you should exclude the internet in your rate search, as there are reputable sites on the net which will help you find rates, calculate your potential loan, and provide other helpful information. I’m suggesting you shouldn’t work with an internet-only firm for your mortgage.
There are two types of mortgage lenders who advertise on the web and on the newspaper rate table: Ones you’ve heard of and ones you haven’t. Why do the major, well-known lenders generally quote higher rates? It could be they have higher cost structures. It could also be they are more reputable and provide a lot more service.
Generally, avoid interest-only loans. Unless you plan to move in a short period of time, or the loan is a short-term “bridge” or construction loan, avoid the “interest-only” loan. If you are only paying interest, you do not build up any ownership or equity in your home.