5 Tips to get a Lower Mortgage Rate

Posted on 07 June 2009

News flash is that mortgage is at historic lower rates! It might be possible that you have heard about that, then you must also aware of the fact that how hard it is to qualify for it as there are “tightened guidelines,” “credit freeze” it all seems to be a bad news.


We can’t deny the fact that nowadays things have been changed. Today’s guidelines are different. But these changes have brought new opportunities for us. We can truly say that it is a historic time to buy a home. All over the country there had been low rates and great deals in real estate.

5 tips to get a lower mortgage rate

Here we are giving you 5 tips to get a lower mortgage rate:

1.    Don’t delay to apply for a home loan. It is the most common sense tip of all the others –don’t wait for tomorrow take action today to get a lower rate. These days this part is especially important – you can’t act upon the advice of all experts; listen to every article, newscast.

Daily the rates are changing and in a lot of news such things are written that are already more than a week old. You should not also wait for expected government bills, packages, or any stimuli by the government – many times this has happened that it has been proposed to subsidize lower mortgage rates, but these types of proposal has never passed. The only fact that you should believe right now is that rates are low now so it is high time that you should talk to a Home Loan Expert.

2.    You just have to make sure that your credit is in good shape. If you have a score over 700 then this will lead the way to the best mortgage rates. If your score is within the limit of 600, you might be looking at a slightly higher cost or different loan – FHA loans shows a little more leniency towards credit. In case if you are not sure that what your current credit shape is, then you must check out Quizzle for a free credit report and score.

3.    Know comes the question that, what your home is worth? To keep up with the neighborhood home is always a good idea and you can do that very easily without any problem from the comfort of your own home.

There are Sites from where you can get a benchmark to estimate your own home’s value. Those loans that have a loan-to-value under 80% come with the best rates and pricing, there are options available up to 97% loan-to-value having great rates.

4.    You should get yourself organized before applying for a refinance. There are a few documents that you should get in order, to buy or refinance. If I give you a quick list then it would include: 2 pay stubs, W-2, tax returns, bank statements in order to show that you have money in reserves and a proof of homeowner’s insurance.

5.    You should work with a reputable lender. Try to find a Home Loan Expert with whom you can feel comfortable to work with. Don’t hesitate to ask any questions if you don’t understand anything, so you can ask as many questions as you would like to ask. It is the responsibility of your lender to get you the best loan possible and also help you determine when to lock your rate. Those who have much experience in this field will know the ups and downs of the market and help you to know the right moment to lock and get you the best interest rate.

Mortgage rates vary with your specific situation and they are continuously changing every single day, sometimes you can see them changing more than once a day. Rates you see may not be the one for what you actually qualify for.

Risks determine mortgage rates. The rates would be as higher as there is more risk that a loan has. Negative factors like low credit scores or little home equity will have a great impact on the mortgage rate that you have qualified for. In case if you are taking cash out of your home then there may be additional cost or points.

A few different factors forms the mortgage rates and these rates fluctuate much like stocks do. So as advised in tip # 5 find a Home Loan Expert with whom you are comfortable with and who is capable of keeping you informed about the changes in the market and tell you when you could qualify for the lowest mortgage rate.

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