Essential Mortgage Rate Tips


There are different ways to look at a mortgage rate. It may be helpful to think of your mortgage rate as the price you pay for the loan itself. Your rate is what it costs to have the loan, without which, many of us would never be able to afford a house. It isn't the bank imposing a way to get extra money out of you, it's simply a way to make the necessary things in life attainable, such as houses and cars.

The financial aspect of real estate will always be at the front of the prospective home buyers mind, and rightfully so, as your mortgage and the mortgage rate are major players. If you're a first time home buyer, prepare yourself to save money by understanding what your options are.

With the use of online technology, it's easy to track what the current mortgage rates are and compare them. Not all lenders have the same mortgage rate. This is one of the most important things to understand about rates. Each lender has its own ability to negotiate a different rate. Take the time to do research as you enter the real estate market and find out what different lenders are offering.


Be sure you are comparing identical loans to get an accurate picture (think apples to apples). Look at the loan as well as the interest rate by using the Annual Percentage Rate (APR) which encompasses the interest, points, and fees in one nice rate over the life of the loan. When you are researching lenders, choose two or three and compare identical offers.

Keep in mind that as you're on the house hunt, your mortgage rate depends on several different factors. It's more than just a matter of picking the lowest interest rate from your lender of choice and locking in. It's based not only upon current mortgage rates, but on your credit score, debt-to-income ratio, employment status/history and the down payment. You do have the option to purchase points in an effort to lower the interest rate (if you have long term plans to stay in your home) or if you are offered a great rate, be sure to "lock" into it.

With the online resources available, you can search mortgage rates right from home. Surrounding area MLS make it easier than ever to find your next home.

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