With the current financial crisis, it's easier than ever for a knowledgeable home buyer to obtain the best mortgage interest rates possible. Wonderful homes and properties sit abandoned all over the nation, especially in hard-hit cities like Las Vegas and Detroit; as such, financial institutions have been forced to embrace a new degree of flexibility and compromise. It's truly a buyer's market right now, and any borrower with a good credit rating and a solid employment history should be able to take advantage of these historically low rates.
To ensure the maximum return on your home investment -- and make no mistake: your home is an investment -- it's always best to take a few basic precautions before signing on the dotted line and being chained to a property for the next thirty years. Here are five tips to ensure that you always receive the best mortgage interest rates:
1. Have you shopped around for a better offer? It may seem obvious, but it's positively shocking how many neophyte home owners rush right into a mortgage the first time a lender says "yes." In years past, especially during the real estate boom of the late '90s through the early '00s, banks and other financial institutions held the keys to the kingdom, and they knew it. It was, quite literally, their way (i,e., their terms) or the highway. That's no longer the case. Don't be afraid to shop around for a better offer. However:
2. Be aware that credit checks leave temporary blemishes on your credit report. If you embrace step #1 too enthusiastically, and allow too many financial institutions to check your credit worthiness within a short period of time, you might ironically damage your chances of getting a loan from any of them. As such, ask your lender if it's possible to do a "soft" credit pull (i.e., a check that does not show up on your credit report). Not every lender will offer this service, but it's worth asking.
3. Discuss terms before allowing the credit check to be run. A few preliminary questions asked early in the interview may convince you that this particular lender is not a good fit for you. If you can discover this before he or she runs the credit check, you've saved yourself a substantial amount of hassle.
4. Make sure your potential lender knows that you're speaking with other financial institutions. Just as a used car salesman will invariably lower a vehicle's price if you mention the possibility of visiting his competitor, so to will a lender be willing to work with you if you mention that the bank down the street offered you more favorable terms. Don't be afraid to play one bank against the other. And finally:
5. Don't be afraid to ask for better terms. No matter what rate you're offered, ask for something lower. If the lender can't provide a lower rate, ask if, at the very least, closing costs can be waived. Remember, today's mortgage industry is more competitive than ever, and your business is very much wanted. You might be surprised what they'll do for you, if you simply ask.
If you follow these suggestions, you should have no trouble enjoying the best mortgage interest rates possible for years to come. Good luck!