Strategies for Finding the
Least Costly Mortgage

Question: We just contracted to purchase a home in Charleston, S.C., where we will be relocating and closing on the house in two months. Where can we find the least costly home mortgage? What should we expect to pay? Should we pursue a variable-rate mortgage or a fixed-rate mortgage in today's economic climate? Is there a single Web site where I can comb the rates of various banks, or must I contact each bank individually the old-fashioned way?

Answer: The general rules of thumb are that you should get a fixed-rate mortgage when rates are low and lock them in. You should get a variable-rate mortgage when interest rates are high, so that your interest rate will drop as the market comes down.

Today's rates are lower than their recent highs, though with the oil crisis and possible return of inflation as a result, they may go higher. It would be a good idea to lock in a loan when you first apply. Go for a fixed rate 30-year loan. Right now they are the best opportunity. Loans for as little as 3% down are widely available, for those with top credit.

There are many web sites that act as mortgage brokers and handle dozens of different financial institutions. Try eloan.com, quickenloan.com and mortgage.com. If you don't want to use the Web, consider a mortgage broker in South Carolina. Get a recommendation from an agent. Most good mortgage brokers these days deal with dozens of financial institutions.

Mr. Irwin has more than 25 years' experience as a Los Angeles-area real-estate broker. He is the author of more than two dozen books about real estate and is recognized as one of the most knowledgeable writers in the real-estate field. Mr. Irwin's most recent book is "Tips and Traps When Building Your Own Home," (2000, McGraw-Hill).

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Nancy, Amsterdam

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