Tips For Getting The Best Mortgage Rate

By February 24, 2015 February 25th, 2015 Around Charleston


We would like to thank our featured guest bloggers this week at Home City Real Estate in Austin, Texas for providing this great information about some common, but difficult questions regarding the mortgage process:

Tips for Getting the Best Mortgage Rate

Searching for the perfect home can be a long and confusing process, especially for first time home buyers. While finding a great property is most likely the first thing on your mind, there are few aspects of a home search more important to ensuring a healthy financial future than finding the best available mortgage for your individual needs. When it comes to mortgage rates, a seemingly small improvement can save you thousands over the life of the loan, so it can definitely pay to properly prepare and shop around before getting too deep into a home search. So, what are the most important things to keep in mind in order to ensure an ideal home loan? To start, finding a great real estate agent is a good idea for any home search, as having professional assistance is never a bad thing when making a huge financial commitment. Let’s take a look at some other things to keep in mind in order to help you get the best possible mortgage.

Before you begin your hunt for a new home, take the time to adequately prepare your finances. Taking a look at your debt-to-income ratio, credit reports and savings will give you a better idea of your potential housing budget.

There are three major items to keep in mind before applying for a mortgage. First, perform your own analysis of your debt-to-income ratio. By doing so, you’ll have a better idea of the amount of home you can legitimately afford, which can save you plenty of headaches down the road. Next, your credit report will play a major factor in lenders’ decisions regarding your application. Be sure to work out negative items on all three of your credit reports before applying. Finally, it is a real benefit to have a substantial down payment when searching for a mortgage. The more cash you’ve got to apply to your home purchase, the more attractive you’ll be to potential lenders.

Special mortgage programs are available from a variety of sources to help make the home buying process easier for qualified buyers. Find out if you qualify for any special programs, and your housing search could get a little less costly.

Special programs come in a wide variety of shapes and sizes, so it can be a good idea to check with your real estate agent for important options worthy of a look. According to NerdWallet, popular programs include VA loans, which offer veterans lower down payment requirements and protection in the event of missed payments; FHA loans, which require as little as 3.5 percent down and are more forgiving of low credit scores; and USDA loans, which are available in rural areas with low down payments and minimal closing costs. It’s always a good idea to prepare before beginning a home search, but special mortgage programs are great options if your financial outlook is less than ideal.

Mortgages come in two main types: fixed rate and adjustable rate. Research the current market to find the better choice for your financial needs, and keep the pros and cons of each type in mind before committing to a loan.

Choosing between fixed and adjustable rate mortgages depends on personal preferences, as both have potential upsides to take into consideration. On one hand, fixed rate mortgages allow you to lock in your interest rate for the course of the loan. If rates are low, this is a great way to protect yourself from increases in the future. On the other hand, adjustable rate mortgages fluctuate over the life of the loan. Typically, these loans feature attractive introductory rates, but it’s important to remember that your monthly mortgage payment could increase substantially following the introductory period. With adjustable rate mortgages fluctuating based on a standardized index, your monthly costs could be much higher (or lower) at points over the life of the loan.

Searching for the best mortgage isn’t always as simple as finding the lowest interest rates. Avoid focusing solely on interest rates in order to ensure that you’re getting the best overall deal for your budget.

According to BankRate, there is more to consider when choosing a mortgage than interest rates. Protect your financial future by evaluating mortgages from every angle in order to prevent a costly mistake. Additional costs, such as discount points, origination fees, underwriting fees and document preparation fees, are important to keep in mind, as well as any prepayment penalties, which could make the possibility of refinancing in the future more difficult. If you’re unsure, depend on your real estate agent for the advice you’ll need to get the perfect mortgage.

Rob C. loves Georgetown area homes, playing ultimate Frisbee and agility with his dog.


Do you have questions about the mortgage process?

Email me anytime: [email protected]

Call me: (843) 437-8386.


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