It finally happened for you. You found your forever home and are ready to start the purchasing process, but how do ensure the best deal for you and your family? Navigating mortgage rates can be overwhelming and confusing. It’s a big decision, so here are some things you should consider when looking into Mortgage Rates.
Your Credit Score
You would be surprised how many people don’t factor in how their credit score impacts the interest rates they will end up paying over the course of 30 years, and most importantly, if they would even qualify for the loan. If buying a home is one of your most coveted goals in life, start looking into your credit at least 6 months before you start shopping for the best mortgage rates. Is there something you can do to lower your overall debt? Maybe you can transfer some of your current credit card balance into a new card, with a 0% APR introductory rate, or you have a bonus coming up soon you can use to pay some of your student loan balance. Doing so might immediately boost your credit score enough points for you to get a better deal when looking into buying your dream home.
When you find a promising mortgage lender, the next order of business is to deep dive into researching their reputation. It’s not only about the mortgage rate they can offer you or their fees, how long do their closings usually take? How available are they to answer your calls and offer you help? If they offer you amazing rates but they’re notorious for being hard to find and out of reach, then probably that company is not a reputable mortgage lender. You want someone who will be a part of your process, actively helping you and making your life easier.
Types of Loans
Do you truly understand mortgage rates terminology? Some loan types include:
- Fixed rate
- ARM (Adjustable-Rate Mortgage)
- FHA (Federal Housing Administration)
- VA (Veterans Administration
- USDA (US Department of Agriculture)
- Non-Qualifying Mortgage
Don’t approach lenders without any knowledge of what you’re getting into. Research and digest the concepts beforehand, so you feel well equipped to handle conversations and negotiations with your lender.
Origination and administrative fees can set you back thousands of dollars right when you thought your mortgage closing was a done deal. In addition to the rate your hoping to acquire, what differentiates your lender from the rest? An example that comes to mind is that our in-house lender has a flat rate for their origination/admin fees, which usually provides some distinct advantages when buyers are looking at properties over $500k.