Tips To Get Low Mortgage Rates
There are a few tips you may
want to pay attention to in order to get yourself the best mortgage rate. With the way the economy is, interest
rates are low and getting lower, making it a buyers market. Banks and other lending companies are becoming
competitive, making it fairly easy to get a pretty low interest rate for your home purchase or a mortgage
refinance. Following these few tips can help you to get the best rate for you.
One obvious tip is that if your credit score is
high, you will get a better mortgage rate quote from different lenders. The very best scores are at seven
hundred forty and up. To get a credit score that is this good, you will need to pay all of your payments on time
and always have a small balance on your credit lines, but not necessarily that you need to have a lot of
accounts. Just be sure that you are very good with your accounts that you do have. Having a score lower than
that and above six hundred and eighty will still give you a pretty good rate; maybe only a fraction of a percent
higher than someone with a perfect credit score. Many of the people who are buying homes or doing mortgage
refinancing will have scores in this area.
A lot of banks are competing because of the
economy, so shop around and see what rates you are offered, including lender fees, discounts, and closing costs.
With a score lower than 680 but above six hundred and twenty, you might consider going to an FHA loan so that
you can get a lower rate. With a conventional loan, your interest rate still might be high because of your
credit score. Getting an FHA loan will mean that the credit requirements are more flexible and they will work
with you better. If you have a credit score that is below six hundred and twenty, you should probably go
straight to looking at a bad credit mortgage.
When you have gotten some estimates from
different lenders, you will want to compare them through the APR, or annual percentage rate, because it will
include closing costs and other fees. Just because the interest rate is lower, this doesn’t mean it is a better
deal if the APR is higher. Look at the different quotes and you will probably want to go with the one with a
lower APR. When you understand all of this and that your credit score will largely determine the mortgage you
will qualify for, you can go about making an educated decision. If you need to, you can work on making your
credit score higher before you are out looking for the best rate.