How can I get Low Mortgage Rates?

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  • Written By: Ken Black
  • Edited By: Bronwyn Harris
  • Last Modified Date: 24 February 2020
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Low mortgage rates may be hard to obtain, but they are advertised nearly everywhere, enticing home buyers to check them out and see what kind of deal they can get. However, a number of different factors play into obtaining low mortgage rates. Getting such a rate may depend on timing, credit, term of loans and other factors.

One of the easiest things for a consumer to do is wait for low mortgage rates. During times of economic hardship, national banks will lower their interest rates, which in turn will inspire other banks to lower interest rates as well, as money becomes cheaper to borrow. If an individual is in a strong position despite the national or international situation, this may be the best time to buy real estate because low mortgage rates will be plentiful among many lenders.

While timing is a big key to low mortgage rates, an even bigger part of the puzzle is having an excellent credit report. Those with a high credit rating are considered to be lower risk. The lower the risk you pose to a lender, the less it will cost for the home loan. Therefore, taking steps to improve your credit rating before applying for a home loan could save you thousands or tens of thousands of dollars over the life of that loan.


Choosing a variable interest rate can also lead to lower rates, at least in the short-term. Some adjustable rate mortgages come with a fixed rate for several years, then change to another rate for the rest of the term. This rate may either be fixed or adjustable. However, generally the first few years of the loan is at lower mortgage rates. After that, instead of jumping to a much higher rate, refinancing may be an option.

The other option for low mortgage rates is to put down a larger down payment. This shows the lender that a borrower can be responsible and save money for certain purposes. Further, it reduces the risk to the lender by building some immediate equity in the home in case a foreclosure needs to happen at some point down the road.

Further, choosing a 15-year term will often produce low mortgage rates. A shorter mortgage poses less risk to the lender by reducing the amount of time the loan is outstanding and building equity faster. Together, these two things can not only work to lower interest rates, but save a substantial amount of money over the course of the loan by not paying on the loan so long.



Discuss this Article

Post 4

GreenWeaver- An adjustable rate mortgage is best for an investor and not a homeowner. A well capitalized investor has the money to wait until the market turns, but a family trying to buy more house than they can afford can not.

It is really best to save at least 20% so that you can qualify for most traditional loans that are not so risky.

I think that this is a great time to take advantage of the low mortgage refinance rates. Mortgage rates are barely above the prime rate. The prime rate is 3% and I have seen some credit unions offer 15 year fixed low fixed rate mortgages for fewer than four percent. If you can afford it now is the time to refinance your mortgage.

Post 3

Mutsy- If you really want even lower rates, you can look at a variable rate mortgage or an ARM. These adjustable rate mortgages start by offering below market mortgage rates and adjust according to the schedule provided by the lender.

Sometimes these mortgages adjust every year, or every two years. The advantage is that these loans allow people to buy homes that they would normally not be able to buy because the payments are substantially lower.

However, these loans should be avoided because if you can not afford a traditional mortgage, then you should pass here because the housing market is difficult and it is no longer easy to sell a home.

So if you get into trouble, you might not be able to sell the house and that is what has happened to many homeowners.

Post 2

Bhutan-Fannie Mae also offers a program called Home Path financing which offers Fannie Mae owned homes for sale that could be purchases with just 3% down and no private mortgage insurance.

These homes are usually competitively priced and can be found in all types of neighborhoods.

I know the best place to look at the current mortgage rates are going to Bankrate. This site offers a wealth of information regarding mortgages all over the country.

For example, if you live in New Jersey, you can look at what the low mortgage rates in NJ. Some of these low fixed mortgage rates can be under four percent.

A 15 year mortgage will always offer low interest mortgage rates, so if you can afford the payments it will be better.

Post 1

Home loan rates are at record lows. Low home mortgage interest rate should really encourage consumers to buy more homes, but the low home mortgage rates are also harder to qualify for.

Many banks offer low mortgage interest rates to those with excellent credit. Credit profiles below 700 may have trouble qualifying for a traditional bank mortgage.

People that do not qualify for these low home mortgage loans initially can try to apply for an FHA loan. An FHA loan is a government back mortgage loan program that allows borrows to buy a home with 0 to 3% down payment.

In addition, the qualifying standards are lower. For example, people with foreclosures on their credit report could qualify if the foreclosure was at least three years ago; a traditional bank loan might require up to seven years.

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