Month: February 2009

When you are in the market for a new home or looking to lower the payments on a current property, a new mortgage loan will be the logical course of action. However, there are many finance companies that will be vying for your business, offering you the best mortgage interest rate and the most affordable terms. Before you jump into the lending pool, it helps to have a few basics under your belt so that the entire process goes more smoothly.

Rates are Competitive
A mortgage company may advertise a particular mortgage interest rate for a fixed loan or an adjustable rate mortgage, but this may be negotiable based on the type of credit history you have and the amount of points you are willing to pay. To ensure you receive the best mortgage interest rate possible, it is a good idea to know what current market rates are for your area. You can easily find this information by surfing the Internet for the many websites that provide this comparison shopping in one easy click. To ensure you are comparing apples with apples, make sure you are looking at points and fees as well as the mortgage interest rate. Once you have found a good deal, you are ready to bargain with any lender who is willing to match the best mortgage interest rate you could find.

Fees are Negotiable
Fees are an unfortunate part of the lending process, but sometimes these figures are up for discussion just like the mortgage interest rate. While banks may not be able to do much to discount set fees for services like an appraisal or filing the necessary paperwork, points are an additional cost that companies often can be flexible with. In many cases, the points are directly connected to the mortgage interest rate, so when the rate goes lower the points go higher. This is why some lenders refer to “buying down” a mortgage interest rate. However, if you find one lender offering a particular rate with no points, it is fair to mention that fact to another lender who is offering the same rate with a few points tacked on. You never know when you might get those points deducted to your advantage.

More Money is Unnecessary
When you are requesting a mortgage interest rate for a refinance of an existing loan, many lenders will ask if you want to borrow additional funds for purchases like home improvements or a family vacation. Your best negotiating powers work when you don’t take any additional money out, but merely put the loan back into your property. So forget the extra cash you will just raise your monthly payment over a 30-year haul anyway.

Finding the best mortgage interest rate is easy once you have the basics of how the lending process works. Shop around and don t be afraid to ask lenders to go lower on their rates or fees to give you the best deal possible. You just might be pleasantly surprised at the loan terms you get.

The mortgage interest rate has been known to rise and fall, and when it’s at an all time low, it may be time to purchase a new property or refinance an existing loan. But how do you know which finance company will offer you the best mortgage rate? The options are plenty and each will promise to give you the best deal possible. However, by arming yourself with some basic facts, you can find the best mortgage rate for your loan.

Know the Competition
The first step in shopping for the best mortgage rate is to know what is available. The Internet makes comparison shopping much easier than ever before, since you can find a whole host of current rates from a variety of lenders with a single click. It isn’t a bad idea to begin checking current rates weekly, once you have a new loan in mind. This allows you to keep up with both current market trends and fluctuations that might arise. Even if you have your heart set on a particular lender, you can always throw out the lower mortgage rate of a competitor to get your loan officer in a negotiating mood.

Know the Costs of Lending
To make your comparison shopping more accurate, you need to be in tune with the sort of costs that can be tacked onto a stellar mortgage rate. It doesn’t do much to negotiate a lower rate if the points and fees are going to skyrocket as a result. When talking to lenders, you always want to find out whether points are charged to get the rate you are asking for and how much the lender charges to process and close your loan. It is important to factor in these tidbits of information, since a 5% rate that charges 4 points may not be a better deal than the 5.25% with no points after all. And points can be negotiated in some instances just like the interest rate can especially if you know what’s going on at the lender down the street.

Know your Credit Report
It is no secret that lenders save the best mortgage rate for the applicants with the cleanest credit histories. Do you know your number? Every credit report is assessed a number that gives lenders an idea how much risk they are undertaking by offering that particular applicant funding. A credit rating over 700 is usually considered “very good” to “excellent”, while a score between 680 and 700 is considered “good”. Anything less than 680 may make you a higher risk to the lender, which may result in a lower mortgage rate. If you know you have a very good credit report, you can rest assured that you are in the driver’s seat when it comes to negotiating the best mortgage rate.

Whether you are in the market for a new home or looking for a lower monthly payment on a current property, knowing how to negotiate a mortgage rate will make all the difference in the loan you get. Keep these tips tucked under your belt when talking to lenders and you are sure to end up with a mortgage loan you like and can afford.