Learn how to get extra mortgage savings by utilizing my proven mortgage shopping techniques. I’ll teach you six ways to compare and shop mortgages.
The ATOMIC Method of Mortgage Savings
The ATOMIC method will accomplish a lot for you. Using this method will make you one of the smartest, thriftiest homeowners in your neighborhood.
“ATOMIC” is a mnemonic. It’s a pattern of letters that will assist you in remembering the method, making it easier to recall my framework during a stressful event, such being in negotiations.
A = APR.
T = Time.
O = Out-of-Pocket Money.
M = Mortgage Payment.
I = Interest Rate.
C = Closing Costs.
Now that you know what the ATOMIC method consists of, its important that you understand that the letters represent features of mortgages. You must learn to compare features across various offers you receive. Just because APR of one mortgage is lower than that of another mortgage, it does not make that mortgage better nor worse. Likewise, it isn’t enough to just compare the closing costs of one loan to another. Other features must also be compared in your analysis, to ensure you’re seeing the full picture.
What Isn’t Covered
We are not going into a discussion of whether you should choose a fixed rate mortgage or an ARM. That decision is personal and a very important one.
Now, what you want to do is figure out which mortgage type fits your lifestyle the closest. At the least, try to narrow down your options to similar types of mortgages. Ideally you want to compare the same type of mortgage. Comparing a 30-year fixed mortgage to another 30-year fixed mortgage, that’s easy. While it’s still possible to compare a 15-year mortgage to a 30-year fixed, comparing an ARM to a fixed is much harder and I don’t recommend it.
If you’re comparing an ARM to a fixed rate mortgage toward the end of your loan shopping process, then realize you’ve made a mistake and should correct it immediately. If this happened to you, then do more research and choose the one type of mortgage that most closely aligns with your lifestyle and your future. That way you’ll get the best deal is by comparing apples to apples.