Naturally, you want to get the best deal for your property for the least amount of money. This holds true for financing, as well.

A lower interest rate means a lower monthly mortgage payment, which can save you much money in the long run. Also, it is easier to qualify for a lower payment than a higher one.

You basically have three routes to finding the best rate. The first is to do all the research yourself. The second is to use a mortgage broker. The third is a combination of the other two.

Do-It-Yourself

With the advent of the Internet, much information is readily available. Once you have educated yourself sufficiently about real estate loans, all it takes is the time and energy to sift through it to find the information you need.

Rates change quickly, so that great rate you find today might not be there tomorrow. Once you find the rate you desire, submit a loan application and lock in that rate.

Locally, Washington Mutual, Bank of America and Union Bank, to name a few, offer very competitive rates. If you are considering a San Francisco property, it may be subject to rent control laws, have commercial influence, be a multi-unit building or be located in a non-residential area, such as a loft. You will want to work with a local lender familiar with this market. They can often make decisions locally and more quickly than out of the area or Internet lenders.

When comparing loans, make sure that you're comparing loans of the same type. For example, you find that "Loan A" for a 30-year loan has a much lower interest rate than "Loan B" (also for 30 years). Upon further inspection, you find that "Loan A" is technically an adjustable rate mortgage, one whose payment is based on a 30-year amortization, but is due through either payment or refinancing at the end of 5 or 7 years. (You will frequently hear these referred to as a 5-year or 7-year fixed-rate mortgage.) While both said "30-year", they're not the same type of loan.

Ask the lender for a statement detailing all fees associated with the loan. Factors such as "points" (points are fees associates with loans. One point equals one percent of the amount borrowed), interest rate and "additional fees" (extra fees which most lenders charge) can vary greatly from one lender to another.

Mortgage Broker

If you don't have the time or experience to "do it yourself", look for a qualified mortgage broker. You want a broker who is local and understands the many difficulties in lending on urban properties. A broker, unlike a bank, has access to all kinds of loan programs from banks, insurance companies, corporations or private lenders. He or she can help select the best available program at the time you make application. Ask friends, associates, or your agent. They may have a broker they can recommend. You want to find a broker who is energetic, flexible and knowledgeable about financing and loans. You need someone who has your best interests in mind.