Mortgage Interest Rates: How to Get the Best Deal

Filed by admin under Mortgages — 7:12 pm
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While the difference is mortgage interest rates don't sound all that significant, remember that a difference of as little as ½ a percent can add up to tens of thousands of dollars over the life of a loan. With that in mind, finding the best interest rate isn't a luxury; it's a necessity.

Pay Your Bills on Time

Perhaps the best way to ensure that lenders offer you the lowest interest rates available is to maintain a positive payment history. Do you still have some overdue bills left to pay? Pay them now so that they aren't left lingering on your credit report.

Check Your Credit Report

Okay, so you think you've paid your bills on time, but are you really sure? Periodically checking your credit will ensure that you haven't overlooked any bills and that creditors haven't made any mistakes when crediting your accounts. If you find an error on your report, address the issue immediately. If the creditor is at fault, request that creditor fix the problem and make note of it on your credit report. Did you find an unpaid bill that you forgot when you made your last move? Make a note of it on your credit report so that future lenders will understand why you were late making payments.

Take Your Time

If you have negative payment history on your credit report, consider putting off buying a home for another year or two. Remember, the longer you go without any negative marks on your credit report, the more likely you are to receive better interest rates.

Shop Around

If you are ready to take out a mortgage loan now, shop around. Get quotes from at least four lenders before making a final decision. Interest rates among lenders can vary significantly, so shopping around for the best rates can save you thousands of dollars.

Be Informed

You can't know what a good interest rate is if you don't know what the national mortgage interest rate is. Generally, banks post these on signs throughout the lobby. However, simply reading the real estate section will provide you with an accurate guide of current interest rates.

Make a Down Payment

The old adage that only people who have money can get loans is partially true. While you can get a loan without having money, you'll get a better loan if you have a little. For example, if you plan on only putting a 5% down payment on your home, you are likely to get a higher interest rate than someone who puts down 20%.

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