Author: Ryann Cairns
Home ownership rates have never been higher. More and more renters are taking advantage of the current low interest rates and becoming homeowners for the first time.
Buying a home is the biggest financial commitment you will ever make. More than likely you will be carrying this debt for decades, and a small difference in your mortgage rate can make a big difference in your monthly payments. A better rate can save you thousands of dollars over the life of your loan. We hope the following information can help you to find the best mortgage for your needs.
Before shopping for a mortgage, it is important to make sure you will be able to afford the required monthly payments. There are numerous calculators available on the internet that allow you to enter the home price, down payment, interest rate and length of loan to calculate your monthly payments. You can use these calculators to get an idea of what your payments will be. This can help you determine how much home you can afford before you begin home shopping.
How should I begin my search for a mortgage? A good first step when shopping for a mortgage is to obtain a copy of your credit report. Your credit score will determine how much you can borrow, and, most importantly, your interest rate. Getting a copy of your credit report at the beginning can ensure you get a mortgage with payments you can afford. How can I get a copy of my credit report? You can obtain a copy of your credit report by visiting the credit reporting agencies’ websites. It is a good idea to obtain a copy of your credit report from all three major credit reporting agencies – Equifax, TransUnion and Experian.
The information shown can vary between credit-reporting agencies. Report any inaccuracies you see immediately. An inaccuracy in your credit report could cost you thousands of dollars from a higher than necessary payments, or even cause you to be turned down for your mortgage loan.
How can I obtain interest rate information? A good place to start is www.bankrate.com. This website can help you compare mortgage rates in your area. Remember that the interest rate you are offered will be affected by your personal circumstances and your personal credit rating. Having a good credit rating will mean you get the best interest rate and lowest monthly payments on your mortgage. Track the direction of interest rates It is a good idea to track the movement of interest rates when shopping for a mortgage. Knowing which direction rates are headed will help you to lock in the best rate and get the lowest payments.
Mortgage rates fluctuate frequently, one month they may be up, the next month they may be down again. It is very rare for rates to remain unchanged for a long period of time. There are so many factors affecting interest rates that it is often difficult to accurately predict rates, but an understanding of key economic indicators can be very helpful. Mortgage rates generally rise and fall along with the yields on Treasury notes and bonds. This is because these government securities are a reflection of the overall direction of interest rates. By watching the Treasury market and trends in the mortgage market, a borrower has a better opportunity to obtain the best interest rate and get the lowest mortgage payments.
How can I estimate my monthly payments? Once you have a good idea of how much you will be borrowing and the prevailing interest rates, you can use an online mortgage calculator to estimate your monthly mortgage payments. This will only be an estimate since your final loan terms may be different, but it will give you a good idea of whether you will be able to afford the mortgage payments.