Looking for the lowest interest rate seems awfully easy, doesn't it? "What's your interest rate?" sounds like such a straightforward question. If it were true you would be able to jump on the Internet and easily look up interest rates offered by mortgage companies without any problem. But it's not that simple. Yet most people spend more time looking for a comfortable pair of shoes than they spend looking for a mortgage that best meets their needs.

It's just not that simple. Like the great variety of shoe styles and sizes, there are many different factors that can affect a person's ability to qualify for a mortgage. If you've ever been frustrated with finding a pair of shoes that fit you just right, you can well imagine the difficulty in finding a mortgage with a perfect fit. It isn't just a matter of looking for a pair in your size.

Heres how it works, from a lenders perspective.

Over time we've discovered common themes associated with why people do not completely pay back the money they borrow. Let's call them "risk factors." What are the common risk factors? Credit score, debt-to-income ratio, occupancy type, and loan-to-value ratio. Other factors include being a first-time homeowner, property type, and location of property.

Quite simply if a person doesn't meet all risk factors for a loan, the interest rate is increased. The worse the risk, the higher the interest rate.

Complicating matters further is that different lenders have slightly different loan qualifications, or underwriting, guidelines. What you may not realize is that different lenders cater to people with different risk factors. Just because the bank down the street won't give you a mortgage does not mean than another lender won't.

Risks are summarized in complex tables, called rate sheets. Here is a greatly simplified Rate Sheet Example

Since there is no standard for rate sheets, every lender has a different format. Oh, and by the way, rate sheets are updated sometimes more than once a day. What we mortgage brokers and loan officers have to do when "pricing out a loan" (figuring out an interest rate) is to check rate sheets for the many different loans from over 130 different lenders against the qualification of the person and the property.

Many people will tell you to compare loans before making a choice. The easy part is asking for a quote. The hard part is having two or more loan quotes based on the same list of assumptions and having a quote be made at the same point in time. With rate sheets constantly being updated, a low rate today may be a very high rate tomorrow.

Expect that when you call for an interest rate quote you won't be guaranteed an interest rate. You'll get, at best, wishful thinking. Lenders who will give out quotes have to make educated guesses. It not only takes a lot of time to do a thorough investigation of all possible loans, but also because interest rates are a moving target.

Some people might even quote you a low rate just to get you to stop looking and work with them. It's similar to calling up a number of shoes stores and asking if the had black tennis shoes in a size 8. Of course they do! A salesperson will assure you that your hunt is over. That they have many white tennis shoes in size 8 on sale. How convenient! Yet when you finally try them on, none of them fit. They're all too narrow.

Mortgages are like shoes. One size doesnt fit all.