Tips For Great Mortgage Rates

Here are some general tips and advice on how you can get rates low enough to make your purchase worthwhile:

Be aware of when your credit score is checked; if it's done during a period when you have any negative information showing up (e.g., late payments, etc.), then this will impact your score and increase the cost of borrowing money in turn. 

It's suggested that if at all possible, try and schedule checking your credit report for a Friday night or over the weekend, as scoring models often update during these times and you can avoid any impact on your score for as long as possible until the information is updated. 

When you start looking for a lender, try and find one that has historically had very strong rates and good customer service. Not only will they be able to explain the process in terms you'll understand, but they'll also have access to more competitive rates overall since they're likely giving out lots of loans.

Refinance Vs. Purchase

Be aware that lenders usually only give borrowers their best rates when those borrowers are buying as opposed to refinancing (e.g., taking an existing loan and restructuring it with a new rate). Generally speaking, if someone wants to refinance, then they won't likely get as good of a deal as they would if they were simply applying for a loan in the first place.

If you currently have an outstanding loan and want to consolidate that with your new one, make sure that this is something you do long before closing on the sale of your home because most banks won't offer very competitive rates when it comes to refinancing. 

Some lenders will charge borrowers extra (e.g., points) or add their own interest rate surcharge (i.e., margin) onto any refi transaction so it's best not to even bother asking them about this type of deal unless you're absolutely 100% certain that you'll get accepted.

Make sure you don't have any derogatory information on your credit report before you start looking for a mortgage. While it may be tempting to simply check umpteen times a day, the reality is that inquiries impact your score and could mean that you'll end up with a higher rate because of this.

Applying Online

Apply with an online lender if there's no other option available. The APR rates you see advertised by these types of companies usually only include the closing costs –which means they won't necessarily reflect what you can expect to pay overall since closing costs don't factor into APRs (in terms of cost). In other words, make sure to take a thorough look at all aspects of borrowing money so that you know exactly what kind of deal you're getting yourself into.

Don't take the first offer anyone gives you (i.e., always shop around). You can generally get a more competitive interest rate by doing this and some lenders will even give you an extra discount for locking in your loan sooner than later. Another option is to see what options you have on the table and try and find a lender that's willing to match them (or at least come close; saving 1-2% isn't usually worth it if it means delaying closing by several weeks/months while shopping around more).

If you're buying a property with someone else, then make sure they contribute at least 20% of the purchase price or put down 20% themselves. In certain regions, lenders will require this amount in order to avoid risk and because of this, borrowers may not get the best rates.

When you know how much you can put down, try and figure out what your monthly payment would be at that rate. This will help you figure out if getting a loan is even worth it or not-e.g., whether you could afford the home without needing to borrow money and also whether you'd be able to handle all aspects of owning a home including taxes, utilities, maintenance costs, etc.)

Conclusion

If you're looking for a mortgage and want to get the best rate possible, there are many things that need to be considered. There's nothing worse than being in over your head with high monthly payments or not being able to afford what you just bought. To avoid these problems altogether, it is important to know how much money one can put down on their home purchase and also make sure they don't have any derogatory information like late payment history on their credit report before applying for a loan.