How can I get the Lowest Mortgage Interest Rates?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 18 October 2018
  • Copyright Protected:
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Obtaining the most advantageous mortgage rates is something that any prospective homeowner desires. While the task is easier in some economic climates than in others, there are a few preparations you should make before you commit yourself to any mortgage plan. If you really want to get mortgage interest rates that are the best you can command, here is what you need to do.

Your first task is to take a long hard look at your current credit rating. How much available credit do you have? What are the balances on your active credit accounts? Do you have any reported incidents of being late with payments or have any bad debt showing up on your report? Lenders will look not only at what you currently owe, but how you’ve managed your credit in the past and what type of debt load you currently carry.

While having several open credit card accounts is not likely to hurt your chances for obtaining great mortgage interest rates, having high balances and making minimum payments at best is a red flag that you could potentially be a credit risk. If you really want potential lenders to look upon you favorably, pay those loan and credit card balances down and free up some of your monthly net income. That will make it easier for you to qualify for lower interest rates.


Next, it is important that you engage in some realistic financial planning. No matter how attractive an interest rate may be, if the monthly payment is more than you can afford, there will be trouble in a very short period of time. The idea is to secure real estate with the best interest rate you can manage on the financing, while still keeping the monthly commitment within your means. This requires that you put together a reasonable monthly budget and make sure you can stick to it. Once you have proven this is possible, you can begin making the rounds to banks, brokers, and other types of mortgage lenders.

A good place to begin your search for favorable mortgage interest rates is with your local bank. At the very least, this will give you something to compare with other options. Make sure you do not commit to the first mortgage that comes your way, no matter how good it may sound or how much the banker may assure you that is the best deal you can get. Shop around a little and compare what your bank offers with other lenders. If that first offer is truly the best you can command, you can always go back and ask your banker to set the wheels in motion.

In your search for great mortgage interest rates, you will hear a great deal of hype along with some solid figures on percentage and rate models that are available here and there. Look over each one carefully. What appears to be very competitive may not be all that great when you read the fine print. For example, does the mortgage include homeowner’s insurance in the bundled package? Does the figure include paying your annual real estate taxes for you? Some mortgage providers do include these options, while others don’t. Make sure you know what you are getting before you are blinded by appealing mortgage interest rates.

Keep in mind that even with excellent credit and low debt, you may not be able to obtain mortgage interest rates as low as you would like. Your monthly income may be lower than necessary, or the location of the property you wish to purchase may be in what is considered a high-risk area for some reason. Understand what factors are preventing you from claiming the best rate and do what you can to resolve those issues in your favor. However, don’t waste time worrying over issues you can’t fix, such as your total monthly income. Just go for the best mortgage interest rates you can, make sure you know what you are getting in the way of amenities, and keep that monthly payment within reason.



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