It
is not very difficult to search for low mortgage rates, however, they
are difficult to be obtained. The banks and the mortgage brokers
advertise the best interest rates so that you may call them up.
However, they are going to provide you those rates only if you
fulfill some specific criteria such as good high credit score,
sufficient income and assets, etc. Read on to know the 5 steps to get
the lowest mortgage rates.
-
Build
a good credit score –
In order to obtain lowest mortgage rates, you will have to build a
good credit. A credit score of 600 or more than that is believed to
be a good one. You
should have a minimum of two items on your credit report that
qualify as turning credit with a low balance. These are lines of
credit or credit cards.
-
Be
ready to buy points
– A point will typically cost 3% of the entire loan amount. This
will reduce your interest rate anywhere from half to a whole percent
depending upon the bank and the loan market. These will be
beneficial for you in the long term.A free mortgage calculator can help you in this matter.
-
Make
sure you have some assets
– You should have some assets in order to avail the lowest
mortgage rate. If you have some money in the bank to cover at least
10% of the loan you want to take out, then you may be able to get
low mortgage rate on your loan.
-
Take
out a short term loan
– A short term loan will enable you to obtain low mortgage rate.
The reason is that it is a better investment if you can pay off the
loan within a short term period. This means that your monthly
payment will be higher, however you’ll be able to save a lot in
interest in the long run.
-
Negotiation
can provide you low interest
– You may negotiate to get lowest mortgage rate. Begin by getting
unofficial quotes on mortgage rates from different banks and
brokers. Take only the best ones and check your credit score to get
an official quote. You can take the best quote to the other banks in
order to see if anyone wants to beat it for getting your business.
Although the banks will tell you that they will not exchange, there
are many managers at the banks who’ll agree to it if they find
that you’re going to walk away.
The
above-discussed steps will help you obtain the lowest mortgage rate.