Find The Lowest Home Mortgage Interest Rates - 5 Tips
Find The Lowest Home Mortgage Interest Rates - 5 Tips
Whether you are interested in upsizing, downsizing, or moving into a home for the first time, you are going to want to find the lowest-possible interest rate on a mortgage loan before you get the process started.
Interest rates, of course, are going to vary based upon a number of factors. That is why it can be so hard to know whether you are getting the best rate. It is a bit like the fear that most people have of buying a new car and thinking you got a good deal, only to learn later that your neighbor paid thousands less for the same thing. Nobody wants to overpay for anything - especially for a mortgage.
Why is overpaying for a mortgage such a bad thing? Because, unless you choose to refinance or move before the mortgage repayment term is over, you will be stuck with paying those extra interest points for decades to come. Over that period of time, just a 1% higher interest rate can translate to tens of thousands of dollars in additional interest payments.
If you are looking for the lowest mortgage interest rates, here are 5 tips for finding the lowest rate:
1. Understand how rates are determined:
The way that mortgage rates are determined is outside of the control of any individual bank or person. Specifically, average fixed rates are determined by something called Treasury note yields, while average variable rates are determined by the fed funds rate.
2. Get a sense for where rates are today in terms of historical rates:
Start your journey toward the best-possible rate by looking at today's rates for your desired loan type (e.g., 30-year fixed, 7/1 ARM, etc.) against historical trends over the past 1-3 years.
3. Get a "nose" for sniffing out the best rates:
Next, you will need to become an expert researcher. When you first start researching different mortgage lenders' websites, each site will look more or less the same. But, as you research them more closely, you will notice that some of them seem more inclined to be open to your negotiating a better rate. Those are the ones you want to work with. Hint: it may not be your existing bank.
4. Build a list of viable low-rate mortgage lenders:
Next, build yourself a list of low-rate mortgage lenders. Start with at least 7-10 lenders and visit their websites, research online discussion boards, etc. to check them out.
5. Apply to at least 5 lenders:
Now, narrow your list down to 5 lenders and start applying for mortgage loans. Be sure to apply to every single one on your list: it would be terrible to stop applying right before you were about to approach the one that was going to give you a low-ball offer.
Consider these 5 tips in order to find the lowest home mortgage interest rates.
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