How to Find the Lowest Mortgage Rate?

When you want to buy a house, mortgage can be a little scary. The best thing you can do is to research. Then guess what? Research some more! In this article that is just what we are setting out to do. We are going to do the best that we can to help you find the right mortgage rates so that your monthly payment will fit right into your budget.

The first thing that you need to do when you start thinking about buying that pretty little house located on twenty plus acres of land is to save up as much money as possible, then save even more. We are talking about every spare penny kind of saving here. The more you save up, because the majority of the companies you are trying to get money from want anywhere between three percent to ten percent down payment on a mortgage loan. Sometimes they want even more depending on your credit score. Which we will talk about more in the next section. Which means the more you have saved up before you go into your search, and keep on saving even while you are looking because it may be a while before you get a house, this will actually drop your interest rate going in, which in turn will also drop your monthly payment.

Another thing you will need to look at is your credit score. We are here to tell you very rarely, and we mean like finding a needle in a haystack kind of rare, will you get a mortgage with a credit score of less than 550. So get all your little ducklings in a row and pay off that debt or if you have no credit history at all look into ways to get your credit score up. You can get a secure credit card to do so, BUT use it wisely because these can be very hazardous to your credit if you don’t.

These are just a few of the easier, less painful ways to get a lower mortgage rate before going into an actual mortgage. Another thing you should look into is fixed rate loans, which are the rate that you get approved for in your mortgage; this is means exactly what it says. The interest rate will never change. There is also an adjustable mortgage rate, which again means exactly what it says. This rate is prone to changing, sometimes they change a few times a year sometimes they stay the same. We preferably lean more towards fixed rate loans because it does not ever change so very seldom will your payment change. Although not just your interest rate determines you mortgage payments fluctuating tendencies. Many other things factor into this such as insurance payments, etc.

Some other things that will determine what your mortgage rate will be is your debt to income ratio, what this means is that if you have 4 car payments a month that are say $225 a month, which equals out to $900 a month and you only make an income of $1,200 a month by the time taxes are taken out. Your debt to income ratio is way too high to be accepted. Your best bet is to keep your debt ratio at about a quarter of your monthly income.

Another thing that you need to research is different banks and credit unions that you can get a mortgage through as well as independent mortgage companies. Each one will have different interest rates which will undeniably influence your mortgage rate.

So in conclusion you need to figure out what mortgage rate you are capable of paying. Then decide within that highest and lowest frame how much you are actually willing to pay. Then keep researching until you find your lowest amount or at least remotely close to it and then get that house!

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