Four Quick Tips on How to Lower Your Mortgage Interest Rate
Gus Benson
Are you buying a new home? I don't care if it's a condo or a house, you will end up spending a lot of money. For most people it's going to be the single largest business deal of their life. To keep expenses in check it is extremely important to try and secure the very best mortgage rate possible. There is a number of things you can do to lower your mortgage rate, and right now is an excellent time because of the low interest rates.
Tip number one - let lenders compete
Banks and mortgage brokers are in business to lend you money. If your credit record is in order and you have a steady paycheck coming in you are a prime candidate for a home loan, and banks will bid under each other to offer you a loan. The trick is to let them know you are an informed customer looking for the very best interest rate, and that you are also looking at what other banks have to offer. Don't just go to your regular bank, shop around!
Tip number two - get your interest rate offer in writing
Right, so you have approached several different banks to try and secure a low interest rate for your new home loan. As soon as one of these financial institutions have pre-screened you and are ready to offer you a loan, get them to put the interest rate they will extend to you in writing. With this interest rate locked in, you can now get back to all the other banks you are talking to and tell them: "If you can't match a 5.25% interest rate, we have nothing to talk about."
Tip number three - don't compare apples and pears
Remember that the interest rate you get is dependent on a number of things, but the main factor is if you are shooting for a fixed or adjustable rate mortgage (FRM or ARM, as they are called for short). This is in fact one of the first decisions you have to make about your mortgage. Say you decide you are looking for a 3/1 ARM, being fixed at an initial low rate for the first three years and adjusted each year after that. That means that is what you are going to use as a basis for comparison between different lenders. Don't get sidetracked by all the other adjustable mortgage rates or fixed rares on offer, they'll only get you mixed up.
Tip number four - go for the adjustable rate mortgage
First of all, everyone has different needs and no one mortgage type will fit all. Some people really appreciate the security of knowing the exact amount of their mortgage payments for years to come, and that means fixed rate is the best choice for them. With that out of the way, what we're looking to find here is the best way to lower the interest rate on your mortgage. And that definitely means adjustable rate. Adjustable rates mortgages are nearly always lower than fixed rates, just take a look at what your local bank will offer you. Over the life of your mortgage that adds up to serious money, and personally I've always hated paying too much!
About the Author
Gus Benson runs http://www.mortgage-content.com, a website dedicated to information on mortgages, home loans and interest rates.
Click to visit his site: http://www.mortgage-content.com
The latest information and news on Mortgages:
Some tax issues to consider on mortgage write-downs (Washington Post)
With the Obama administration and private lenders actively considering mortgage principal-reduction programs to help financially distressed homeowners, the Internal Revenue Service has issued a new advisory to taxpayers who receive -- or seek to receive -- such assistance. The IRS gets involved in m...
Borrowers in foreclosure prevention plan losing mortgage aid (Washington Post)
About 90,000 distressed borrowers have lost their mortgage aid under the government's foreclosure prevention plan, and many more are at risk of losing the help, according to Treasury Department data released Friday.
Some tax issues to consider on mortgage write-downs (Washington Post)
With the Obama administration and private lenders actively considering mortgage principal-reduction programs to help financially distressed homeowners, the Internal Revenue Service has issued a new advisory to taxpayers who receive -- or seek to receive -- such assistance. The IRS gets involved in.....
Lender blames escrow shortage for $400 increase in monthly mortgage payment (...
Q: We have owned our house for many years, and the lender has always escrowed money to pay our real estate taxes and insurance. This year, we received a notice from the lender that our monthly mortgage payment will increase by over $400 because there is an escrow shortage. Can we cancel the escrow r...
?Mortgage Financing Risks High Inflation? (This Day)
Management of Diamond Bank Plc has said the rising inflationary rate in the country is having adverse impact on the operations of mortgage business.
Yahoo! News Search Results for refinance
Refinance may limit financial flexibility (Bankrate.com via Yahoo! Finance)
Reduced financial flexibility may be the price for a home refinance that lowers your mortgage rate.
Pernod Ricard Plans to Issue Bonds to Refinance Absolut Buyout (Bloomberg)
March 10 (Bloomberg) -- Pernod Ricard SA , the world?s second-biggest liquor maker, is planning to sell six-year bonds to help refinance loans used to buy the Absolut vodka brand in March 2008.
REITs show rising prices but growing risks (Washington Post)
Analysts, bloggers, real estate dealmakers and managers of mutual funds are as puzzled as I am about the 90 percent rise in REIT indexes since March 2009. Commercial real estate lags the business cycle, so shares of real estate investment trusts normally do not rebound until after it's apparent the....
Euro finance ministers to agree on Greek aid: source (Reuters via Yahoo! News)
Euro zone finance ministers are likely to agree on Monday on a mechanism for aiding Greece financially, if it is required, but will leave out any sums until Athens asks for them, an EU source said on Saturday.
Do-it-yourself taxes vs. the CPA (Washington Post)
After turning to a professional, one taxpayer went from owing thousands to getting a big refund.