How to Get the Lowest Mortgage Rate
News flash if you’ve been living in a cave: mortgage rates are at historic lows! So maybe you’ve heard that, but you’ve also heard how hard it is to qualify – “tightened guidelines,” “credit freeze” – seems to be all bad news.
We can’t deny things have changed. Guidelines ARE different. But out of change comes new opportunities. It’s truly a historic time to buy a home – low rates and great deals to be had in real estate all over the country.
So here are 5 tips to get a lower mortgage rate:
- Stop procrastinating. The most common sense tip of all – you have to take action to get a lower rate. This part is especially important these days – you can’t listen to every article, newscast or “expert.” Rates change daily and a lot of news is based on things that are more than a week old already. Also don’t wait for supposed government bills, packages, stimuli – many have been proposed to subsidize lower mortgage rates, but never get passed. The fact is: rates are low NOW. Talk to a Home Loan Expert NOW.
- Make sure your credit is in good shape. A score over 700 will lead the way to the best mortgage rates. If your score is in the 600’s, you may be looking at a slightly higher cost or different loan – FHA loans are a little more lenient toward credit. If you’re not sure what your credit looks like, check out Quizzle for a free credit report and score.
- Know what your home is worth. It’s always a good idea to keep up with the neighborhood home sales and you can very easily do that from the comfort of your own home. Sites like CyberHomes.com and Zillow.com can give you a benchmark to estimate your own home’s
value. The best rates and pricing come with loans that have a loan-to-value under 80%, but options are available up to 97% loan-to-value with great rates.
- Get yourself organized. To buy or refinance, there are a few documents we’ll need you to get in order. A quick list would include: 2 pay stubs, W-2, tax returns, bank statements (to show you have money in reserves) and proof of homeowner’s insurance.
- Work with a reputable lender. Find a Home Loan Expert you can feel comfortable with. Ask a lot of questions if you don’t understand. It’s your lender’s job to get you the best loan possible and help you determine when to lock your rate. An experienced lender will know the ups and downs of the market and help pinpoint the right moment to lock and get you the best interest rate.
Mortgage rates vary based on your specific situation and change every single day, sometimes more than once a day. Rates you see may not be what you actually qualify for. Mortgage rates are determined by risk. The more risk factors a loan has, the higher the rate could be. Negative factors like low credit scores or little home equity will impact the mortgage rate you qualify for. Also, if you are taking cash out of your home, there may be additional cost or points.
The more you hear on the news about rates, the more likely they are changing. Mortgage rates are comprised of a few different factors and fluctuate much like stocks do. So, like #5 denotes – find a Home Loan Expert you can be comfortable with and who can alert you to changes in the market and when you could qualify for the lowest mortgage rate.
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