Mortgage rates are good but you still need to research them
It’s good to see the economy is improving, and that means that investors are feeling more comfortable. As a result, mortgage rates have been going down so if you need a new mortgage soon this could be some good news for you. However, before taking out a new mortgage make sure you find the best one by comparing rates from different providers. But, since mortgage rates are currently very low, many consumers think they’re getting a great deal on their mortgage. This is true to an extent— if you’re able to get a 30-year fixed loan for less than 5.4% and live in an area of strong employment growth. While these areas do exist in the United States currently, not all borrowers will qualify for them. So what should you do if you don’t have the best rate available?
The first thing most people want to do when they hear about a low interest rate is simply apply for it and forget about it until the loan is approved. While this is certainly a valid strategy, it isn’t the best approach. You could end up with a rate that’s higher than you think. For example, let’s say you want to live in Washington State, which has lower housing costs than most of the country. That means that your rate will be lower than it would be otherwise and if you live in an area that has lower employment growth then it may still be higher. When considering whether or not to refinance your home mortgage consider these factors and decide if your current rate is really a good one or not.
Secondly, you should consider what you would need to do to qualify for a new loan. For example, if you have a 20% down payment already and excellent credit then refinancing may not be too much of an issue. However, if you’re only putting down 10% on your home and have a credit score of just 650, applying for a new mortgage could be more difficult than you think. In this case, it might be better to sit on the current mortgage until your credit score improves or until you can increase the down payment amount by saving more money or finding some extra income from somewhere else.
The bottom line is that while mortgage rates are low now, they aren’t necessarily low for everyone. If you’re thinking about refinancing your home or applying for a new loan, make sure to consider the factors above before making a final decision.
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Title: Rise in mortgage rates? Prepare yourself with an emergency fund first! [ARTICLE START]
M ost people always want to get the best possible deals on everything that they buy, but sometimes doing so isn't possible. This is especially true when you're buying big ticket items such as cars or homes that require a lot of money up front and may not be affordable for everyone all of the time. If you need a home loan and you're looking for the best rates possible then it's important to always shop around. However, everyone should know that not all good mortgage rates are created equal and some of them can be much better than others. The problem is that every financial situation is different and what's best for one person isn't necessarily going to be the best for someone else.
As an example, let's say that you need a new mortgage soon and you're looking at rates from five different lenders. Two of them have rates in the low-4s, two of them have rates in the high 4s and one has a rate in the mid-5s but lower closing costs. Which one should you choose? There are a lot of factors that go into making this decision, but the highest interest rate isn't necessarily the best. The one with closing costs could be a much better deal than you think and can even be cheaper than the borrower with the low-4s.
There are two primary reasons for this. The first is that with a mortgage, your interest rate is only one part of your overall expenses. By assuming that lower rates always beat higher ones you could actually end up overpaying for your home and paying more in interest than if you had just gone with a slightly higher rate from the get-go. The second reason involves timing. Even if a zero-cost loan isn't the best long-term deal on the table, if it gives you the opportunity to buy your home now instead of waiting six months or a year then it can be well worth the investment.
The bottom line is that in this economy it's very easy to focus too much on your interest rate and not enough on factors such as closing costs and other expenses. Remember, you have a finite amount of money that you need to use for a down payment and closing costs, so never let yourself get carried away with trying to get the absolute lowest rate available. If you can afford better options then by all means go for them but make sure to think about all of your options before making a final decision.
As always, the key to getting a great mortgage rate is to shop around. Do your homework and look into all of your options before making a decision and you'll be on your way to paying as little interest as possible on your home.
If you're having trouble paying your mortgage then it's probably time to consider refinancing it. However, before making a final decision there are a few things that you need to be aware of regarding refinancing and it isn't necessarily something that everyone should take on.
Mortgage refinancing can be very expensive but since most people who refinance their home will do so more than once, this shouldn't worry most borrowers too much. While it's true that some people will pay thousands of additional dollars over the life of the loan in interest, it shouldn't be much more than that. As long as you're paying off your mortgage in full, even with a modestly higher interest rate, you'll be fine. So while you should take out some type of insurance against potential refinancing damage it shouldn't concern most home owners too much.
So what should you do if you've decided that refinancing is right for you? The first thing to think about is how much money you need to put down on your new loan.
Conclusion:
If you're thinking about refinancing your home or even just starting to consider it, you should take some time to consider your options and think about whether or not it's a good idea. While it may be difficult to determine what the best mortgage rates are, there are a few factors that can help most people out. As long as you keep these things in mind when shopping around for a new loan you should be able to find one that's right for you and will help improve your finances in the short-term and long-term.
As always, the key to getting a great mortgage rate is to shop around.