Are you planning to buy a house in Houston? Before you begin your search for house hunting and apply for a mortgage loan, it is important to know about the mortgage rates that the lenders will ask for. Like every home buyer, you would also like to get the best mortgage rate as it can save you thousands of dollars over the life of the loan, as well as reduce your monthly repayments. Therefore, there are several reasons why home buyers try to get the best mortgage rate.
However, how could you get the best mortgage rates Houston? What are the things that can help you to get the lowest mortgage rate? Well, there are plenty of things to do to ensure a mortgage loan at the lowest interest rate. Here are some of the ways that can help you to achieve this.
Boost your credit score
When you apply for a mortgage loan, your lender will first examine the credit score. A good credit score is helpful for getting the best mortgage rate. A healthy credit score is always good for you. The higher your credit score, the better the terms you can get. You can ask the online providers about your credit score. In case your credit score is bad, there are ways to improve it, including paying off your loans on time, avoiding new debts, not making too many credit inquiries, etc. So, try to strengthen your credit score to get the lowest mortgage rate for your home loan.
Increase your deposits
Managing a large deposit upfront can be difficult for you to accomplish, but if you can accumulate 20 percent of the value of the property or more, you will save money. You will not be charged for the lender’s mortgage insurance. Besides, you will have more initial equity in the house and you will need to pay a lower interest rate.
Compare mortgage rates
When shopping around for mortgages, you will need to compare rates of the mortgage loan to see who offers the most competitive deal in the market. And the ideal ways to compare rates is by looking at the comparison rates instead of the headline rates. The comparison rate gives you a more realistic price for your mortgage, which includes fees.
Use a mortgage calculator
A mortgage calculator is useful not just when you compare mortgage rates from different lenders but also when you compare different products that one lender offers. This calculator will let you see what your repayments will be, based on your loan amount, term and interest rate. If you use the calculator to compare two loans, you can see the differences.
Consider the nature of the mortgage
The nature of your home loan will also be a crucial factor that helps to determine the cost of your loan. Generally, there are two types of mortgages to choose from; one is a variable rate loan and another one is a fixed-rate loan. With a variable rate loan, your interest rate can change at your lender’s discretion. But when you will choose a fixed-rate loan, the rate of interest will stay the same for an agreed period. Based on the nature of the loan, you will have to pay the rate of interest.
Shopping for the best mortgage will not only be about the interest rate. You will also need to consider the fees, associated costs, and customer service. Moreover, you need to consider the different types and features of the mortgages available in order to get the best deal for your situation.
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.