When you apply for a mortgage, you are going to be bombarded with mortgage rates. It can be confusing. Here are some pointers on choosing the best rate available.
Choosing Your Loan Program
You are going to need to decide which loan program you are going go with. You can choose between a fixed, hybrid, or an adjustable rate mortgage or ARM. A fixed rate is a constant rate that is not changed throughout the entire loan life. A hybrid rate is a rate that is set to be fixed for a predetermined amount of time then turns into an ARM. An adjustable rate mortgage (ARM) is a rate that varies and can change throughout the loan life.
You can base your loans off of how long you want to keep your home. If you are thinking of living there for less than ten years, consider looking into an adjustable rate mortgage. For a long-term solution most people go with a fixed rate loan, which is preferable for families looking to settle at their house for a long time.
Preapproval: The First Step
Preapproval is important. Do some research and find the right lender for you. Call them and state what type of loan you are interested in, the down payment that you are willing to fork out, and your credit score. This is especially important when you are a prospective looking into purchasing a house. Remember, before going out and looking for the house and falling in love with a specific one, be sure to get preapproved to get an idea of what they will lend you.
Call Your Lenders
The mortgage rate market constantly changes throughout the day. While you may find a mid -5 percent mortgage rate in the beginning of the week, check another lender and you could possibly find the same loan in the low 4 percentile. By consistently checking the mortgage rates, you could potentially close the deal with a solid figure and a low rate depending on the market.
Before you go and let your lenders take care of you, be sure that they compete with each other to find you the best rate under the same conditions. Mortgages can be a hassle but with these tips, you can be sure that you will stumble across an acceptable rate that you can work with.
Bio: Kuba Jewgieniew is the founder and CEO of Realty ONE Group, a real-estate firm dedicated to finding you the best homes out on the market.