Mortgage Rate Shopping: 10 Tips to get a Better Deal

Buying a property is always a big investment for most of us; hence, we look for the best mortgage rates to diminish the mortgage burden. We have all seen big posters and advertisements stating meager mortgage rates but have never really gotten our hands on any of them.

This article will provide tips that might help you get a better deal. Sometimes, getting promised a lower mortgage rate and eventually getting the same rate that others are getting is pretty frustrating. The preliminary step in getting a good mortgage rate requires some legwork and effort.

Mortgage Rate Shopping: 10 Tips to get a Better Deal 1

The best way to get a good mortgage rate is to shop around and see which mortgage rate is the lowest. Often, we gather only one quote from our real estate agent or bank and then go forward with it, later realizing that we are paying more.

The Truth of Advertised Mortgage Rates

Sometimes, we see meager mortgage rates advertised on TV, radio, or even f. Now, they will often have some points included in it. So, for instance, if the advertisements say something like 3.75% with 1 point, it generally means that you need to deposit 1% of your principal amount to the bank, and then they will provide you with the mortgage amount. To put that into perspective, if your property costs $200,000, you need to pay $ 2,000 initially to avail of that mortgage rate.

Again, sometimes the mortgage rates are subjected to the best-case scenario, which generally goes on to mean that, if you need to avail that mortgage rate, then you need to have a credit score above 800, or you need to pay about 20-30% of the total principle as a down payment.
Hence, before jumping to the conclusion, you need to examine the conditions associated with the mortgage rate.

The lowest is not Always the Best.

Most of us go for the lowest interest rate without considering the effective rate we pay the bank or the mortgage provider. Often, points accompany the lowest interest rates or have steep fees.
When you opt for a mortgage, ensure you know what is being charged to you, and then consider whether it’s a good mortgage.

Compare Loan Types

While searching for a mortgage, consider the type of mortgage you want, the 15-or the 30-year one. It would help if you thought how long you will stay on the property. If you will not last for 30 years, then there’s no point in taking a mortgage that would continue for 30 years. You can apply for a much lower rate under the 5/1 ARM.
At the same time, you can also refinance your mortgage to a lower rate if the amount is not that huge. For instance, if you were on a 6% mortgage rate on a 30-year fixed mortgage plan, you can drop the speed to almost 3% or less by refinancing the mortgage at a 15-year mortgage plan.

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