Best Mortgage Rate

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Is the Best Mortgage Rate All I Should Be Looking For?

We'd love to be able to wave a magic wand and find out the best mortgage rate of the day and offer it to you on a plate. Unfortunately, taking out a mortgage loan doesn't work in that way. Mortgage rates are constantly changing and are dependent on a number of factors. It's also true to say that the best mortgage rate or a low mortgage rate is not always best. You should take a number of other things into consideration before you find best mortgage rate for your personal circumstances.

So how do I know what the best mortgage rate is for me?

Low mortgage rates are always attractive. If you have an excellent credit history you will probably be successful in your application for the best mortgage rate in the market place. That is because you are considered to be an excellent risk. If your credit history is marred in any way, this will have affected your credit score and may mean that a mortgage lender will increase the interest rate.

Obtain a copy of your credit report before applying for any mortgage. Then you can understand what your credit score is and whether you may have to apply for a mortgage for people with bad credit, which will have a higher interest rate.

What other factors should I take into consideration?

It is important to realise that although a certain company may be advertising the best mortgage rate in your state, you need to ask them some salient questions before applying. You need to make sure that to make sure that there aren't any large hidden costs which could make this mortgage more expensive. You also need to understand that the mortgage lender is a reputable company.

Here are the questions you should ask the mortgage lender to determine if it is the best mortgage rate for you:

Do you have some references or credentials that I could see?

  1. Will the mortgage interest rate being offered increase if I have a less than perfect credit history?
  2. Can I ask you to provide me with a good faith estimate for all of the fees associated with the mortgage? The fees to make sure you understand are points, application processing, appraisal costs and closing costs.
  3. What is the term of the loan? How long will I be making monthly payments for?
  4. Is this a fixed rate mortgage or an adjustable rate mortgage?
  5. Will there be any prepayment penalties if I decide to take out a refinance mortgage and need to pay back this best rate mortgage?
  6. Are there any balloon payments?
  7. Can you tell me how much the monthly repayments will be?
  8. Can you provide me with a mortgage amortization schedule so that I can see how much principal I am paying off every month?

Once you have obtained answers to all these questions, compare costs and rates with other lenders. Take all factors into consideration and you may find that the best mortgage rate for you isn't necessarily the lowest.