How Is Your Interest Rate?
Thinking of buying or building that perfect home? Before you sign on the dotted line some research into home loan interest rates will be needed. This will give you a much better chance of obtaining some interest rate savings.
To begin finding the best mortgage interest rates you will want to study the current rates and rate movements or trends. Home loan interest rates generally reflect the over all picture of interest rates. They basically will follow Wall Street Securities with their rise and fall.
When To Pay Down Your Debt
Pay off your debts before applying for a home mortgage. High consumer debt could actually cause your mortgage loan application to be disapproved. Carrying debt is going to cost you a bunch of money via an increased mortgage rate.
Home loan interest rates combined with your individual financial status would then determine how much you can borrow. This would have an impact on how much house you can buy. Higher interest rates would mean you may have to settle for a bit smaller home than you originally had planned.
What Are Points?
One of the things that you may consider to lower home loan interest rates is to consider if you are willing to pay points or not. A point is 1% of the total loan amount. It is the up front fee that would reduce your monthly interest rate and the total amount of interest over the length of the loan. By paying points you are essentially buying your way to a better rate and trading between paying now vs. paying later. Paying points should only be considered if you plan on keeping the loan for at least four years. The reason this is suggested is it gives you time to get back the upfront money with the lower monthly payments.
Be Glad You Took the Math – Time & Rate
Another factor to consider in regard to home loan interest rates is the length of the loan. A typical 30 year mortgage will have a higher interest rate than that of a 15 year mortgage. The 30 year mortgage will have lower monthly payments but you would pay thousands of dollars more in interest rates over the life of the loan than that of a 15 year mortgage.
Do You Meet The Banks High Expectations?
You have to have a work history that shows how long you’ve been working if you wish to get a home mortgage. A majority of lenders need at least 2 steady years of work history in order to approve any loan. Switching jobs too often may cause your application to get denied. You should never quit your job during the loan application process.
The Pay Off On A Higher Down Payment
Also a higher down payment would have a positive effect on your home loan interest rate. This down payment would typically need to be 20 percent or more. This would furnish you with more equity in you home, giving you a much better interest rate.
Most lenders offer a variety of options to help assist you with home loan interest rates. When shopping around make sure you are looking at comparable points and rates among the different lenders.
The Bank Is Saying No!!!! More Often
All You Need Is … A Great Interest Rate
One of the final things in regard to consider along with a home loan interest rates is if you want a fixed rate mortgage or an adjustable rate mortgage. A fixed rate does not change throughout the life of the loan. The other, a variable rate, has the possibility of going up or down.
Your application can be rejected because of any new changes to your financial situation.
Do your homework on home loan interest rates, choose between one of the many programs offered and then decide on how much a down payment you can afford. In the long run this research will pay off handsomely for you.