How Do I Get Real Low Mortgage Rates?
A home loan is one of the biggest investments a consumer is likely to make. Arrangements for payment reach into the decades and it requires a great amount of planning to ensure one’s long-term plans will be successful. Part of that planning is looking to the mortgage rate. Undoubtedly, lower is better for most buyers and it will be an actionable goal for many.
There are the obvious ways to secure a low rate that many people will be aware of. More favorable rates are generally given to people with a good credit history, a sizable down payment to put up on their own, and a consistent and stable financial history. There are other ways to secure lower mortgage rates and even lower the monthly payment.
One of the basics is the length of the loan. Mortgages are generally available in 15, 20, and 30 year payment schedules. The 15 year payment schedule generally offers the best rates because that signifies to the lender that you are willing to pay the loan back quickly. A 30 year loan will typically have a higher rate, but feature lower total payments as the sum is effectively spread. Choosing the 15 year loan will result in higher monthly payments, but the long-term savings the borrower enjoys on interest well outshines a longer term mortgage.
Shopping around is one of the best tactics to getting a good rate. A mortgage broker will often have access to a number of different bankers and their programs to find the best rate for your specific situation. Inquire and collect quotes for a number of different programs from several lenders. Most financial institutions will cite rules that there is no bartering on their rates. However, it does not hurt to take a low quote and see if someone will beat it. A good many times a manager will make a lower bid if it stops you from leaving without signing on. Anything is better than nothing, depending on the person you are dealing with.
Another option they may have available is purchasing points. For a one time charge, one can shave between a half and a whole percent off of the interest rate. The general charge is approximately 3% of the total amount loaned. This may not be the best approach on a 15 year loan, but it is definitely worth the investment on the longer ones if you can afford the upfront payment.
One of the most important things to keep in mind with the financial industry is how personal it is. The rates that are offered in advertising are the best case scenario for someone with an immaculate credit history. Therefore, you should definitely explore different options before committing. Many different factors of your personal information and financial history will affect the way your loan is handled. Getting these things in order before talking to a mortgage specialist is your best angle for getting a great rate.