Compare Mortgage Rates To Get The Best Mortgage
Do you know how important it is to compare mortgage rates before signing for a mortgage
?
Finding a mortgage loan with reasonable rates may need some research. To compare
mortgage
rates can be an ideal solution, but it may need some home work. Did you know that your credit score is also a factor involved in deciding the mortgage rates? So, before beginning the research on rates, you may like to get your FICO score to determine your credit risk level.
You can obtain a copy of your FICO score from any of the credit monitoring companies, and evaluate your score to determine the credit risk category you fall in. The higher credit risk category may get only high interest rate mortgages. If your FICO is less than perfect you will be paying a much higher mortgage rate than is listed.
Steps involved in the process of finding best rates include,
Searching for mortgage companies, preferably online, for mortgage rate information. But, you need to check if you are on a secured page while giving your social security number or other personal details.
Furnishing your FICO details and requesting for a mortgage quote from the lenders.
Comparing the mortgage rate information and choosing the best from the list that may suit your needs.
Consulting a local realtor who can help you when you are not able to find the right one. They can offer you with the lenders they work with, and negotiate with the lenders for a lower interest rate.
When you apply for a mortgage, the rate you may be offered will depend on various factors and criteria.
Mortgage rates are of different types. Some of the most commonly offered rates are,
Fixed rate in which the interest rate and your payments may not change for the entire term.
Adjustable rate in which the rate is variable that may increase or decrease based on the market rates.
Combination of fixed and adjustable rate. The initial rate may be fixed for some years and then can be adjusted based on the market situation then.
Split rates are also available, in which the rate is fixed for one part of the loan and is adjustable for the other. For example, you may ask for 60/40 balance. The rates may be fixed for 60% of your loan and adjustable for the remaining balance.
If you are in the high credit risk category, signing a prime mortgage may be hard. You may instead opt for a subprime mortgage.
Subprime mortgage loan rate is usually higher than that on a prime loan. Borrowers get classified into high credit risk category when their reports on credit get associated with higher default rates, including limited debt experience or excessive debt, a history of missed payments, failures to pay debts, and recorded bankruptcies.
The subprime mortgage rates are determined with reference to the size of the loan, structure of the loan, borrower credit rating, ratio of borrower debt to income or assets, ratio of loan to value or collateral. One such type of subprime mortgage is the simple closed-end loan with higher rates. This type of loan usually results in higher payments and a greater profit for the lender. You can check out for the best ongoing rates through mortgage rate charts available online.
by: Ask Bill
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