When it comes to securing your home, there are a few financial basics you must have in order to find the lowest mortgage interest rates available to you. For instance, you must know before you even begin what type of mortgage interest rate you can qualify for. While this information is usually made available to first time home buyers, many people do not realize that there are variables in your current mortgage rate that can affect your ability to secure the loan. For instance, your FICO score can determine what type of mortgage interest rate you qualify for. Here is more on your mortgage interest rate options.
If you want to have an idea of what type of interest rate you can expect to receive from the Lender, check your last week’s file with the three largest credit reporting agencies: TRW, Experian and TransUnion. Look for any pattern that shows the same three agencies consistently sending your application to the same Lenders, and be aware of any changes in the file that indicate an upward move in your file. There should be one or more Record Low Mortgage Interest Rates in your file right after your last week of credit-card payment history. If there are three or more of these changes, your interest rate could be in danger of being lowered. If you notice any suspicious activity in your file, talk to your Loan officer immediately, and do not wait for next week’s report.
Another way to determine what the Lender is thinking, is to look at the last few financial reports they sent you. If you are in the process of applying for new home loans, and you are not yet approved, then you know that you are likely being pre-approved. If you are approved, this is a good sign, and the Lenders will most likely be using the same methods when determining the lowest mortgage interest rates for your loan. If you are not approved, they will send you a short report detailing the status of your application. It is a good idea to go over this report thoroughly, because you will want to make sure all information on your file is correct.
If you are thinking of applying for a refinance, and you are getting a negative response from all of the lenders that you have checked out, then you may be able to qualify for historically low interest rates. One of the first places you can check to see if you are eligible for historically low interest rates is at Bank Rate. Bank rate is a website that is owned by Bank of America and is one of the largest online lenders of home loans. When you log in to the Bank rate, you will see if you are eligible for historically low interest rates on your loans. If you are, then you will be eligible for a lower interest rate than what you were originally paying and will save money in the long run.
The reason why mortgage interest rates have decreased over time is because they were so high in the past. Homeowners enjoyed low mortgage interest rates, because of historically high values of the homes. Lenders didn’t like to foreclose on properties, so they were willing to give mortgages with low interest rates to people who could not afford them. However, after the global crisis hit, the values of homes around the country dropped drastically. Now, there are fewer properties on the market, and the lenders are competing even more to give homeowners low interest rates. If you are a homeowner who has been struggling to make payments and have checked with a few different lenders to find the lowest rate, but have not been successful, you may have found the solution you were looking for.
Another way to help you find the lowest mortgage interest rates is by raising your credit score. If you have good credit, then you can find a better loan deal. However, if you have bad credit, then your interest rate will be higher, because the lender views you as a higher risk. You want your credit score to be above about 725 before you look for a loan, otherwise you don’t stand a chance.
In addition to raising your credit score, consider refinancing your home. Refinancing your home with the current interest rate you have on it can save you hundreds of dollars per year. It can also help you lower the principal on your loan, which lowers your monthly payments and saves you even more money in the long run. When you refinance, your interest rate may decrease from your current rate. Depending on the mortgage lenders you work with, your interest rate may decrease as much as half a percent, or even more. If you do not have an outstanding loan at the time of your refinancing, it is important to ask your potential mortgage lenders if you can keep your current interest rate, or if they will require a higher interest rate.
Once you have found the lowest mortgage interest rates, keep your eye on the horizon. In the next two years, the Federal Reserve Bank will begin to raise interest rates. Watch the news and see what indicators point to an increase in inflation. You do not want to be stuck with a mortgage loan that costs more than inflation will allow in the next two years!
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