Getting the best mortgage rate is crucial now more than ever due to rising interest rates. Your mortgage rate affects both your monthly payment and the total amount you’ll pay for the loan during its length.
The amount of your down payment, your credit score, the value of the home you’re buying, the time period of your loan, and other factors, all affect the interest rate of your loan. We’ll outline the information you need to find the best pricing
“There are three pillars: your credit score, your income (which is converted to a debt-to-income ratio) and your assets,” explains Josh Moffitt, president of Silverton Mortgage in Atlanta.
To secure the best possible rate, here are a few steps you can follow:
Although a lower credit score won’t prevent you from getting a loan, it can be the difference between getting the best rate and being forced to accept more expensive borrowing terms. Borrowers with the highest credit scores, usually 740 or above, get the best mortgage rates. The lender will typically provide a cheaper interest rate if they are more confident in your ability to make payments on time.
If you can show at least two years of consistent job and income, particularly from the same employer, lenders will see you more favorably. Be prepared to provide W-2s from the previous two years, as well as pay stubs dating back at least 30 days, when you apply for a mortgage. You will also have to present documentation for any bonuses or commissions you may receive.
If you have the ability to cover a 20% down payment, it can help you get a lower mortgage rate. Lenders accept lower down payments, but in most cases if you put less than 20% down, you’ll need to pay private mortgage insurance, which may run from 0.05 percent to 1 percent or more of the initial loan amount annually. The sooner you can pay down your mortgage to less than 80 percent of the total value of your home, the sooner you can get rid of mortgage insurance, reducing your monthly bill.
Even though 30-year fixed mortgages are popular, if you believe you have located your long-term home and have strong cash flow, you may think about getting a 15-year fixed-rate mortgage to pay off your house faster. If you are refinancing your current mortgage, you may also choose a 15-year term. Currently, 6.250% is the interest rate for 15-year fixed mortgages, according to Bankrate.
Here are some tips:
Obtain a mortgage by applying to several lenders so you can compare their offers.
Compare loans within a set period of time. You are encouraged to compare offers from the three major credit bureaus.
Utilizing the Loan Estimates, compare closing costs. A Loan Estimate document detailing the conditions and costs of each loan must be provided by each lender.
The closing process might occasionally take several weeks, and interest rates may change during this time. Ask your lender to lock in your rate once you have signed the house purchase contract and secured your financing. Although the service occasionally has a fee, it frequently makes up for that cost, especially in an environment where rates are rising.
Move in now to an East Arlington single-family with an updated kitchen and bath, finished basement space, large yard, and garage. Live in this darling home, or expand to create your dream home. Lots of possibilities without suffering through a fixer-upper!
UNDER AGREEMENT! This 4-bedroom townhome near Davis Square is now under agreement. It did not take long for this amazingly spacious home to sell. It was a joy staging this home for our clients.
Groceries, restaurants, shops, theatre, and more to sustain the quality of life you crave only blocks from this charming townhouse on a bucolic street.
Move in now to an East Arlington single-family with an updated kitchen and bath, finished basement space, large yard, and garage. Live in this darling home, or expand to create your dream home. Lots of possibilities without suffering through a fixer-upper!
UNDER AGREEMENT! This 4-bedroom townhome near Davis Square is now under agreement. It did not take long for this amazingly spacious home to sell. It was a joy staging this home for our clients.
Groceries, restaurants, shops, theatre, and more to sustain the quality of life you crave only blocks from this charming townhouse on a bucolic street.
Cambridge homes (and Somerville, and Arlington, and…) can be charming, and quirky.
The Beacon Group is a client-driven real estate team working in Greater Boston to help clients buy, sell, and invest in real estate. We provide straightforward, analytical advice, empowering clients to make successful and informed decisions. We provide our buying clients with constructive insights, allowing them to identify the right property and enabling them to make purchase decisions with confidence. Our recommendations to both buyers and sellers are specifically crafted to meet clients’ short and long-term housing and financial goals.
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