Searching for the Lowest Interest Rates

Posted by Matthew Lahti on Thursday, May 30th, 2013 at 9:47pm

Interest rates and fees make mortgages more expensive than it should be.  It adds thousands of dollars more than the original mortgage amount you asked for.  There’s more to finding low interest rates than a good credit score, paying debts and meeting requirements.

Shop around for mortgages with good interest rates and fees.  Ask lenders about their mortgage rates (including interest) and compare three-five offers.  Gather important information during that chat over the phone or that face-to-face visit.  Surprise fees like closing costs, title insurance, legal fees, application fees, appraisal costs and pre-paid interest.  Gather the APR (annual percentage rate) and finance charges.

When comparing interest rates learn how interest rates are adjusted.  Interest rates start out low but can climb depending on interest rate changes.  Ask lenders how often rates are adjusted, at what index rate and how high it rose in the past.  Figure out how often interest rates are reset.  Anyone owning or thinking about getting an adjustable-rate mortgage needs to know this.  Fixed-rate mortgages may not have to worry about this, but it wouldn't hurt to have the information.

Negotiations can lead to low fees and interest rates.  Lenders don't want to lose business with you because of a disagreement.  They want to make it work.  Lenders know that there is too much competition for business out there to let you walk away.  Start the negotiation process by suggesting to the lender to write down or to print out a copy of every fee mortgages might accrue. Ask the lender if any of those fees can be waived.  Then ask if any fee can be reduced.

Lock in fess and the interest rate by adding it in the contract.  This is the deciding difference between a lender telling you that the interest rates will be low and a lender enforcing it.  When a lender tells you that interest rates will be low it will stay low--until the interest rate market rises.  Then the low interest rates you promised will rise as the market rises and drop as the market drops.  When the lender is under a signed written agreement the low rate will remain locked until the loan is completely paid.  Market rises won’t affect your low interest rate on the mortgage contract because lenders are under agreement not to raise it.

Mortgages aren't cheap.  You ask for a certain amount of money to cover the cost of your dream home.  It should be near the exact amount when the mortgage is paid, not thousands of dollars over the limit.  A good deal is hard to find, but it's worth searching the globe to get.  For more information on interest rates, mortgages and real estate contact us.

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