Home loan mortgage newport beach california

It's easy to find a good mortgage rate, but not necessarily the lowest.

Applying for a mortgage online is convenient--you'll probably save a lot of time by filling out the application sitting at your home computer instead of at the loan officer's desk. But can you save money?

To find out, we logged on to three popular online mortgage sites and shopped for a $200,000 mortgage for the purchase of a hypothetical $250,000 home in the Northeast U.S. Our fictional buyers had enough cash to make a 20% down payment, plenty of income and the top credit ratings necessary to qualify for the best rates. We tried to beat the average rate-point combination for the Northeast that week--7.09% and 1.3 points--as reported by Freddie Mac, which resells mortgages as bonds.

You're not likely to beat the average rates online (not by much, anyway) unless you do a lot of pointing and clicking. We found the best deal through mortgage broker HomeShark (www.homeshark.com): a 7.125% rate from Flagstar Bank of Bloomfield Hills, Mich. That was higher than the average rate, but closing costs were lower--a 0.75-percentage-point refund (or $1,500 on a $200,000 loan), which would cut closing costs to $1,208.

QuickenMortgage (mortgage .quicken.com) had the same rate, offered by Chase Mortgage. But even with a $225 rebate of closing costs for applying online, the mortgage carried 1.75 points, or $3,225 with the rebate.

We also searched for a quote on the Web site of one of the nation's biggest mortgage lenders, Countrywide Mortgage (www.countrywide.com), based in Calabasas, Cal. Countrywide is aggressively hunting online business, and its loans appear on other online-mortgage sites such as HomeShark. (We would have saved $25 by applying directly through Countrywide's own site.) For a mortgage at 7.125%, Countrywide would have charged 0.625 point on the day we checked, which was very close to the Freddie Mac average.

SMART STRATEGIES. You can't beat the averages without knowing what they are. Start by getting a weekly update from Freddie Mac on the Internet, at www.freddiemac.com. Then, comparison shop online. If you find the best rate there, go for it.

But don't neglect to check rates close to home. You can't recognize a great deal from an online lender until you've shopped your local market, says Keith Gumbinger, vice-president of HSH Associates, a Butler, N.J., company that surveys lenders. Give local lenders a chance to beat rate quotes you've found online. Randy Johnson, a Newport Beach mortgage broker and author of How to Save Thousands of Dollars on Your Home Mortgage (John Wiley & Sons, $14.95), quoted a 7.125% interest rate and half a point for our home buyers. "I'd do that in a heartbeat," Johnson said. "I can get a deal like that closed and out of here in ten days."

HSH sells weekly surveys for 46 metro areas plus California, New Jersey and New York, with rates and phone numbers for 12 to 70 lenders in each market. An e-mail version costs $11 (800-873-2837; www.hsh .com), and a faxed copy costs $19. You can also search current rates in 120 markets for free at www.kiplinger .com (click on "Yields & Rates").

Online or off, check all the rate-point combinations. Each Web site we checked showed a half-dozen or more. Lower-rate, higher-point deals (as low as 6.5% with up to 3.25 points) could prove to be less expensive if you keep the loan a long time.

Ask about rates for the very best borrowers. For example, Countrywide offers a sweet deal called the "Gold Credit" loan. It's not easy to qualify for, but if you do, Countrywide will reduce your costs by 0.75 point (or cut your interest rate by an equivalent amount if you choose a no-points loan). If you're willing to accept a five-year prepayment penalty (which doesn't apply if you sell the house), Countrywide will take off another half point.