Buying a property is always a big investment for most of us, and hence, we look for the best mortgage rates so that the mortgage burden gets a little diminished. We have all seen big posters and advertisements stating meager mortgage rates but have never really got our hands-on on any of them.
This article will see some of the tips that might help you get a better deal. Sometimes getting promised aand then eventually getting the same rate, which others are getting, is pretty frustrating. The preliminary step in getting a good mortgage rate needs you to do some legwork and give in some effort.
The best way to get a good mortgage rate is to shop around and see which of the mortgage rate is the lowest. Often most of us gather only one quote either from our real estate agent or from our bank, and then go forward with it, later realizing that we are paying more.
The truth of Advertised Mortgage Rates
Sometimes, we see some 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 goes on to mean that you need to deposit 1% of your principal amount to the bank, and then they will provide you the mortgage amount. Just to put that into perspective, if your property costs $200,000, you need to pay $2000 initially to avail 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 are paying to the bank or the mortgage provider. Often it is seen that the lowest interest rates are accompanied by points or have steep fees associated with them.
When you do opt for a mortgage, make sure that you know what is being charged from you in total, and then consider if it’s a good mortgage or not.
Compare Loan Types
While you are searching for a mortgage, consider which type of mortgage you want to take, the 15 years one of the 30 years one. It would help if you considered; how many years you are going to stay on the property. If you are not going to stay for 30 years, then there’s no point in taking a mortgage, which 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 years fixed mortgage plan, then you can drop the rate to almost 3% or less by re-financing the mortgage at a 15 years mortgage plan.
Find the best rates at super-rates.com.