Want To Lock Down The Absolute Best Mortgage Loan That You Can? Be Sure To Read These Expert Pointers


Ways to shop for the lowest mortgage rates

When purchasing a home, you always want to get the lowest mortgage rate you can. For this reason, it is best to shop around. In order to do this, you want to begin with a plan. Here are some strategies to shop for, and qualify for, the best mortgage rates. Read: Best Mortgage Lending Companies for 2017.

Establish a baseline. Get a referral from someone you trust and contact that lender to obtain your credit score and discuss your loan options. Your first lender can help you compare conventional financing, as well as loan terms, so you can make an informed decision on which loan program you should use.

Increase your credit score. Conventional lenders charge a higher interest rate for lower credit scores. Raising your score can will help you get lower rates. Most lenders require a minimum credit score of 620. Work with a lender who can use a credit score simulator to advise you on what steps to take to improve your score.

Consider a shorter loan term. Shorter loan terms can get you a lower rate. You can save thousands on interest payments with a shorter term, although it is crucial to be sure that you can handle larger payments. See: Five Worst Mortgage Lender Banks – Business Insider.

Contact a mix of institutions, rather than just one. Some lenders who are eager to generate more loans might offer the best mortgage rates for homebuyers rather than refinancing homeowners. It’s best to try a mix of places such as a direct lender, a regional bank, a credit union, a community bank and a national bank. Read on: How to not Get Gipped When Shopping for a Mortgage.

Consider putting a larger down payment. The larger your down payment, the less of a risk you become to the lender. The bank is having to loan less money, and having more cash for a down payment than is required, means you likely have other equity.

Ask questions. Every borrower must be prepared to answer the following questions before lenders can provide an accurate rate quote:

• How large is your down payment?
• Are you buying a single family home or a condominium?
• Are you purchasing?
• Do you intend to waive escrow and pay your taxes and insurance yourself?

Do your own research. You should still do your own research, even after talking to the financial institutions. You should look online, ask around, and compare all of the numbers, so you can compare interest rates and negotiate your best deal.

Always provide the same information. Make sure when you request a rate quote that you provide all lenders with the same information. Mortgage rates change often, so you can’t necessarily get the same quote tomorrow. Here is some information that you should always be consistent about:

•The quality of your credit
•The location, type, and use of your property
•Size of your down payment or the amount of home equity you have

Here is a great video on how to find the best mortgage rates when looking to purchase a home:

 

Want To Lock Down The Absolute Best Mortgage Loan That You Can? Be Sure To Read These Expert Pointers

3 thoughts on “Want To Lock Down The Absolute Best Mortgage Loan That You Can? Be Sure To Read These Expert Pointers

  • January 7, 2016 at 10:49 am
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    What are the benefits of a shorter mortgage?

    Reply
  • January 7, 2016 at 10:51 am
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    Well, there are actually many.

    1. One of the biggest benefits of a 15-year mortgage term is the ability to quickly pay off your home loan. This option is perfect if you plan to stay put and don’t want to pay your mortgage for a lengthy period of time. Mortgage payments are huge expenses, but with your payment out of the picture, you can focus on other things like preparing for retirement, working less hours, and enjoying the freedom of not having a mortgage payment.

    2. Save Money on Interest. If you’ve ever taken out a loan, you’re familiar with interest and how quickly it can add up. Factors such as your credit score and down payments can affect the interest rate on a mortgage. However, the shorter your finance term, the less you pay in interest; therefore, choosing a 15-year mortgage over a 30-year mortgage saves you a ton of money in the long run. For example, if you finance a property for $200,000 at 4% interest over 15 years, you’ll pay $66,288 in interest. However, if you finance a home for the same amount with the same interest rate for 30 years, you’ll pay a whopping $143,739.

    3. Build Equity Faster. Equity is the difference between your house’s value and what you owe your home loan lender. Home equity builds as your property value increases and your mortgage balance decreases. Unfortunately, equity builds slowly with a 30-year mortgage because it takes longer to pay down the principal balance. However, since you pay less interest on a 15-year mortgage, you can build equity at a faster rate.

    Reply
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    Reply

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