How To Find The Lowest Mortgage Rates
Finding the lowest mortgage interest isnt a matter of luck and circumstance
. It takes research, time and work to scout out the mortgage lenders and get the best quotes from them. Heres how to find the lowest interest rates when youre looking for a mortgage.1.Start by cleaning up your act.
Mortgage lending is a business, and like any business, lenders want to work with people who are trustworthy and can be expected to pay their bills. The best mortgage rates are offered to the borrowers with the best credit scores. That means that your chances of being offered a mortgage with a low interest rate are best if your credit score is good. Check your credit score, correct any mistakes you find on it, and if necessary, do a little bit of cleanup on your credit record. The better your credit rating, the lower the interest rates youll be offered.
2.Check with your regular bank first.
If you have accounts with a particular bank, put them on your list of places to ask for loan quotes. Sometimes a personal relationship with a bank can net you a lower interest rate than the bank would offer someone without an account. In addition, sometimes your own bank will offer a lower interest rate if you agree to letting them debit your account directly for your mortgage payment.
3.Dont stop with your own bank, though.
Once you get a quote from your own bank, start shopping around to see if you can beat it. Community banks and credit unions often offer mortgages with better terms and interest rates than larger national or regional banks. Talk to a loan officer at your local credit unions, and dont be shy about letting him know that youre shopping for the best rate and already have a quote from your own bank. Depending on your credit rating, the credit union may be willing to beat that quote.
4.Check with national mortgage lenders.
In addition to banks and credit unions, be sure to also check with finance companies. Finance companies that specialize in mortgages are often willing to offer mortgages to people with lower credit scores, and often offer flexible mortgages with fairly low interest rates.
5.If youre buying a new home, ask your real estate agency for recommendations.
While real estate agents wont usually recommend a specific lender for your mortgage, most of them are very aware of the policies and practices of your local lenders. Many of them maintain a list of local lenders or mortgage brokers who can help you obtain a mortgage with a low interest rate. At the very least, they can point you in the direction of lenders who deal with clients like you.
6.Work with a mortgage broker.
Mortgage brokers dont lend money. Instead, they specialize in hooking up mortgage lenders with home buyers. Because this is their daily business, mortgage brokers usually have access to loan officers at local banks and lenders, and can help put together a deal for you with a low interest rate. Do expect to pay a fee to a mortgage broker if you go through a broker, though some banks will foot the fee themselves.
7.Shop online for mortgages with low interest rates.
Dont forget that youve got mortgage options outside your local area. The internet has made it easy to shop for loans and mortgages outside your usual business area. Youll find a number of mortgage and loan finder sites where you can ask for a quote from multiple lenders all at once. Its usually just a matter of filling out a very simple form online describing your needs and answering a few questions. Your request for a quote will be submitted to several lenders, who will then contact you to follow up and take a loan application or quote request.
8.Get at least three quotes from various lenders so that you can comparison shop.
Different lenders, even different lenders in the same area, have different policies about the interest rates they offer. One lender may automatically offer their lowest interest rate to anyone with a credit score about 750, while another may require a credit score of 800 in order to quality for lower interest rates. In addition, not all lenders use the same credit scoring algorithms, so you may be the ideal customer for one while another considers your application just marginal.
9.Make sure that you are comparing like mortgages.
When you ask for a quote on a mortgage, make sure that all of your quotes are for the same kind of mortgage. Its the only way to be sure that youve got an accurate comparison. Decide what kind of mortgage you want say a 30 year fixed rate mortgage and get a quote for that type of mortgage from each lender you approach.
10.Dont be shy about bargaining.
If youve got a low quote at one bank, but would rather do business with a different lender, dont be shy about bargaining. Often, if you let the lender know that youve got a lower quote from another lender, theyll be willing to come down on the interest rate.
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