Preparing To Buy A House?
So, the time has come to buy a house and you need to take out a loan to finance that home. Naturally, you are going to want to find the lowest-interest-rate mortgage loan possible to save tons of money over the life of your loan. With all the loans available out there, however, it will be difficult to know how to get low-interest-rate mortgage loans. Yet there are several tips you can follow to get the best deal on a mortgage and save the most money on your loan.
Try To Improve Your Credit Score!
First, you need to do whatever you can to get the highest personal credit score possible. The higher the credit score, the lower your interest rate, and there are steps to improving your credit even if it is good to begin with. Pay off as many debts as possible, make sure the information on your credit report is correct, and do whatever else the credit bureaus recommend to get a higher credit score.
If Necessary, Pay Points!
Second, be willing to pay points on your mortgage loan. Points are prepaid interest and paying for one or more points will get the total percentage rate on your loan lowered. This can save you tens or even hundreds of thousands of dollars in the long run.
Stick With Fixed
Third, stay away from adjustable-rate mortgages if you can. These loans begin with interest rates that are often lower than fixed-rate loans, but these low rates do not last forever. They will periodically adjust and become less helpful to you, causing your loan payments to increase and the overall cost of the loan to go up. A fixed-rate loan guarantees the rate for the full term of your loan; thus, there will be no surprises in the form of surprise increases in your interest and payments.
Shorten The Term
Fourth, take out a fixed-rate term for as short a period as you can. Fifteen-year fixed mortgages will cost less in interest than thirty-year mortgages.
Do Your Due Diligence
Finally and most importantly, shop around before committing to a fixed-rate mortgage loan. Get several rate quotes from different lenders so that you can choose the lowest rate available to someone with your income and credit profile.