Finding the best mortgage rate is very important and will take some effort on your end. Mortgage percentage rates can vary depending on many different factors. The variance will cause higher or lower monthly payments and will also determine how much you will be paying in interest through the life of your loan. This needs to be considered carefully as this will cost you thousands of dollars in interest payments alone. You definitely want to get the best rate available to you.
When a lender is determining your mortgage rate, they will look at many factors. Your Fico Score is suggested to be at a minimum of 620. The lower your score, the higher the interest rate. The higher your score, your interest rate will be lower. If you have a low credit score, take the time to improve your credit. You may want to attempt this on your own, but many people who are serious about buying a home sooner than later, use a credit repair company to help speed up the process.
A higher down payment may help you get a lower interest rate. Putting down 20% will save you hundreds on your monthly payment and thousands on your total interest paid through the life of your loan. Taking the time to save may be difficult, but it is worth it in the long run.
You should also determine how long you intend to be in the home you want to purchase. Is it a long or short term investment? If it is a long term investment, a 30 year mortgage will provide you with the best fixed rate for the life of the loan. Whereas, if you are not planning on keeping the home long term, an adjustable-rate mortgage may be on option for you. ARM’s offer low initial mortgage rates, but it is important to sell the home before the rate readjusts. This may be a high risk option for some, but is also a good option for others.
Be sure to compare mortgage lenders. This isn’t a race to the finish line. Do your homework, check comparable rates online and ask others whom they recommend. Also, when you meet with a lender, consider how they treat you. This is an indication as to whether or not they have your best interests in mind.
Please contact us for any of your home buying or selling needs. We are always happy to help!