How to Consolidate and Pay Off Your Mortgage Loan

A 30 year fixed rate mortgage is a very attractive option. For many homebuyers with good credit, it is one of the first loans they are offered. In order to get the best rate, it is necessary to understand the terms and conditions associated with the loan as well as knowing what the market is telling you. Here are some tips to help you find the best 30 year fixed rate mortgage.

Shop around. While this sounds obvious, you would be surprised to see how few people take the time to shop around before making a commitment. By shopping around, you will be able to find the lowest interest rate possible along with different repayment plans to suit your individual needs. If you have good credit, you may be offered a no documentation loan. These are pretty much a rip off because they don’t require any paperwork and therefore will carry a much higher rate of interest.

Research loan offers. Many lenders offer fixed rate mortgages but depending on your circumstances, some may not be so competitive. To ensure you receive the best loan offer, it pays to do your research. Talk to banks and financial institutions to see what their loan offers are along with doing your own homework online.

Choose wisely. While many consumers believe that interest rates will always be low on refinancing mortgages, the opposite is true. The ideal situation is to secure the best rate possible when purchasing a new home and to keep the payments as low as possible. This means working with a mortgage professional who is familiar with the current mortgage market and can guide you toward the type of loan that will work best for you.

Choose wisely. Mortgage rates do fluctuate, more than most people think. If you plan on living in your home for a long time, you should consider a fixed rate mortgage. On the other hand, if you are only planning on moving out after you have purchased your home, an adjustable rate mortgage may be the better choice. Adjustable rate mortgages come with variable interest rates, which can vary, hence the name.

Look at the big picture. When it comes to financing your home, remember that a fixed-rate mortgage has a set rate that will not go down. The problem with an adjustable rate mortgage is that if interest rates drop lower than the fixed rate, your monthly payments could go up. Therefore, you must calculate the larger picture: how much am I going to be able to afford when all is said and done?

Shop around. With today’s high-tech lenders, comparing different mortgage offers is easy. Simply use your computer and the Internet to search for different interest rates. Some websites actually allow you to fill out a short online form, and then you can compare multiple offers from dozens of lenders. By shopping around, you are sure to get the best deal possible.

Shop for a loan with low points. If you can, try to find a mortgage with a low interest rate. This will save you money in the long run, because you will not have to pay as much interest as you would with a higher interest rate. Another option is to get a home equity loan (which is basically a second mortgage). A home equity loan has low points; however, there is also the possibility of losing your house if you do not make your payments on time.

Get a loan with a longer tenure. The longer you can go without repaying your loan, the better your chances will be of finding a competitive interest rate. As time goes by, your home’s value increases which will require you to pay off more principal. Therefore, it is advisable to take advantage of any advances in the value of your home.

Negotiate for better terms. You can often get a lower interest rate by negotiating with your lender. You can also request an additional time period to let your 30 year fixed rate principal compound at a higher rate of interest.

Most important of all, always be prepared to act quickly. The lowest interest rates do not usually last forever. You never know when you will unexpectedly need your mortgage loan. Therefore, act quickly and make your mortgage payments.