Taking on a mortgage is the largest debt many individuals ever acquire in their lifetime. Saving as much money as possible on this loan can mean paying off your home faster, and having extra to put away for long term goals like retirement. Minimizing your mortgage rate is the surest way to save on your home over the long haul. Here are a few solid ways to locate the best mortgage rates.
Like all other types of interest rates, market demands and trends play an enormous role in shaping rates. The average rate is a product of how many mortgage applications are being submitted, how high investor demand is for Mortgage Backed Securities, as well as interest rates on other investment instruments such as US Treasury Bonds. Fortunately, you can use this information to your advantage when you're shopping for the best rates.
Always make sure you're watching the weekly averages on rates in the run up to a loan application. The median rate in your area gives an instant point of reference as you're researching potential creditors online or at your local bank branch. Don't forget to take your personal debt tolerance into account too. Locate an online mortgage calculator to run several scenarios. These estimates quickly show projected loan balances over time, and you can easily see how various rates affect the monthly payment.
Great mortgage rates aren't solely determined by what banks are offering up front. Individual factors such as credit rating, down payment size, and employment count. Banks are always looking to minimize risk and make money, and they offer their lowest mortgage rates to “prime borrowers” who fit a low risk profile. So, before you're ready to apply for a first loan or re-finance later on, remember to resolve outstanding issues in personal finance to secure the best rates.
Finding a good mortgage rate is predictable with these tips. Although it may take time, it's well worth the wait, since even a half percent difference can mean thousands of dollars saved over decades.