How To Find the Best Mortgage Rates
Mortgage rates can change daily and can vary widely depending on the borrower’s personal situation. The difference can mean tens of thousands of dollars over the life of the loan. Here are some tactics to help you find the best mortgage rate for your new home loan.
It Doesn’t Hurt to Shop Around
You may have one lender in mind or someone who your real estate agent typically works with. However, you should compare official Loan Estimates from a minimum 3 different lenders to make sure you’re getting a competitive interest rate. This way, you can find out for yourself that you will get the best rate for your home loan. Plus it doesn’t hurt your credit to shop around for the best mortgage rates.
Compare Fees with Each Lender
Review at each lender’s fees and closing costs to fully assess what it will cost you for the loan. When you apply for a loan, you will receive a Loan Estimate from your lender that makes it easier to compare the total cost of the loan, which includes the fees.
Increase Your Down Payment
Your down payment amount can have an impact on your mortgage rate. Typically lower mortgage rates are available for those with a down payment of 20% or more. Consider increasing your down payment to see if it will get you a lower mortgage rate for your home loan.
Improve Your Credit Score
Your credit score is one of the biggest factors that affects the mortgage rate that you will be offered by lenders. Usually, the higher your credit score, the lower the interest rate for your home loan. It’s best to review your credit score and get it in the best shape possible before you apply for a mortgage.
Consider Your Loan Program
The 30-year fixed loan is the most common loan program, but adjustable rate mortgage (ARM) and 15-year fixed loans offer lower rates. The downside with the ARM is the possibility of your rate changing significantly, and higher monthly payment for the 15-year fixed loan. However, one of these loan programs could help you pay much less interest over time for your home loan.