There are a variety of ways you can secure the best mortgage rate possible. As a consumer, you must do careful analysis of the housing market before you jump into a mortgage. Here’s a guide to find great mortgage rates.
Compare Rates All Around
First of all, it’s crucial to shop around. As a borrower, you’re entering into one of the most important financial decisions of your life. It’s important not to rush headlong into something you may regret. All you have to do is look a variety of different places. You should investigate at your local bank, online, and with different lenders.
Always compare interest rates and make sure you’re aware of any fees involved with mortgages. Take a careful look at any prepayment penalties, and be sure that you can refinance without paying too many fees if the need arises.
The $1,000 Rule: A Rule of Thumb
Generally, a lender that charges you less than $1,000 in fees is offering a good deal. However, be on your guard to make sure you don’t get tricked into any hidden fees. Good credit will really help you lower interest rates on a mortgage. Before you get involved in any sort of borrowing scheme, you need to be sure that you’ve got the credit to earn your loan. You can get a free credit report from the three major bureaus, which are Experian, TransUnion, and Equifax. If there are any mistakes on your credit score, be sure to fix them.
Fix Credit Discrepancies
Don’t get stuck with an interest rate you don’t deserve. And don’t be afraid to dispute any credit discrepancies that might show up on your credit report. Paying your bills on time is the number one way to keep your credit score high. It makes it a lot easier to negotiate with a lender when you’ve got proof that you’re a responsible bill payer. If you’re applying for a mortgage, try to be sure you don’t have any late payments on your credit report for at least six months before you fill out the application. Lenders want to be sure that they’re entering into an agreement with someone who can pay bills on time. Foreclosure are extremely costly for most lenders, so they want to avoid that if it all possible.
Pay Down Pesky Credit Card Debt
You absolutely must pay down any credit card debt that you’ve got. This will help you boost your credibility with lenders. Of course, the amount of principal you can put down will strongly affect your interest rates and your monthly payments. As a rule, it’s a good idea to put down as much principal as possible on a home. Don’t ever get involved in adjustable rate mortgages. Fixed rate mortgages are much better, as you can be totally aware of how much you owe every month. If you are applying as a couple, then you should carefully budget your monthly income so that you can afford your mortgage. Never fall behind on a mortgage. This will negatively affect your credit score and could drive interest rates up. Only obtain a loan from a lender that is licensed and regulated in your state. You will benefit highly by doing some investigative work before you enter into a mortgage.