How to get the Best Rate on your Mortgage

How Do I Get the Best Rate for My Mortgage Loan?

If you are looking for a mortgage loan, you will want to get the best interest rate possible. After all, this rate will determine the amount you will be paying on your home each month, so it’s best to start off with payments that are as low as possible.

Fortunately, there are steps you can take that will help you get a low interest rate. Here are some things you can do to get the best rate possible.

Research Lenders

The internet is a great resource when it comes to finding lenders. You can look online to find out which lenders are reliable, the minimum down payments they require, the minimum credit score they accept and more. Customer ratings and reviews are available as well.

Also, remember, once you are quoted an interest rate, you are under no obligation to accept that rate. You are free to shop around to try and find one that is lower and go with the lender who offers you the best deal.

Finally, when talking to lenders, be sure to ask them the right questions. Interest rates aren’t the only thing you need to be concerned about. You also want to ask them about their customer service policies, their turnaround time and any fees in addition to interest and capital.

Get Your Credit Score in Shape

Got a lot of unpaid debt? Is it bringing your credit score down?

Unfortunately, lenders will look at low credit scores and see it as a poor reflection of your ability to repay the debt. The fact that they are taking a risk on you will make your interest rates increase.

Luckily, you can do things to improve your credit rating. One is to pay off any debt you have.

You can also order a free credit report from one of the major credit bureaus to make sure your report is accurate and free of errors that can bring down your score.

Find the Right Kind of Lender

There are different types of home lenders and the one you choose will affect your interest rate. Here is a list of the ones you can choose from:

·        Credit Unions: Credit unions are member-owned financial institutions that offer low interest to shareholders. Membership restrictions have eased up over the years so it shouldn’t be too hard to find one you can join.

·        Mortgage Bankers: These bankers work for a specific financial institutions and offer loans directly to consumers.

·        Correspondent Lenders: These are usually local mortgage loan companies that can make you a loan but rely on a pipeline of other lenders who they will immediately sell your loan to.

·        Savings and Loans: S&L’s have dwindled in popularity over the years, but they are community-oriented and therefore worth seeking out.

·        Mutual Banks: Like S&L’s mutual banks are also community oriented and offer competitive rates.

Hopefully this article has given you some valuable background on finding a low interest loan that’s right for you. We wish you luck moving forward in the home buying process.