Lowering your mortgage interest rate
Are you buying a new home? I don't care if it's a condo or a house, youwill end up spending a lot of money. For most people it's going to bethe single largest business deal of their life. To keep expenses incheck it is extremely important to try and secure the very bestmortgage rate possible. There is a number of things you can do to loweryour mortgage rate, and right now is an excellent time because of thelow interest rates.
Tip number one - let lenders compete
Banks and mortgage brokers are in business to lend you money. If your creditrecord is in order and you have a steady paycheck coming in you are aprime candidate for a home loan, and banks will bid under each other tooffer you a loan. The trick is to let them know you are an informedcustomer looking for the very best interest rate, and that you are alsolooking at what other banks have to offer. Don't just go to yourregular bank, shop around!
Tip number two - get your interest rate offer in writing
Right, so you have approached several different banks to try and secure a lowinterest rate for your new home loan. As soon as one of these financialinstitutions have pre-screened you and are ready to offer you a loan,get them to put the interest rate they will extend to you in writing.With this interest rate locked in, you can now get back to all theother banks you are talking to and tell them: "If you can't match a5.25% interest rate, we have nothing to talk about."
Tip number three - don't compare apples and pears
Remember that the interest rate you get is dependent on a number of things, butthe main factor is if you are shooting for a fixed or adjustable ratemortgage (FRM or ARM, as they are called for short). This is in factone of the first decisions you have to make about your mortgage. Sayyou decide you are looking for a 3/1 ARM, being fixed at an initial lowrate for the first three years and adjusted each year after that. Thatmeans that is what you are going to use as a basis for comparisonbetween different lenders. Don't get sidetracked by all the otheradjustable mortgage rates or fixed rares on offer, they'll only get youmixed up.
Tip number four - go for the adjustable rate mortgage
First of all, everyone has different needs and no one mortgage type will fitall. Some people really appreciate the security of knowing the exactamount of their mortgage payments for years to come, and that meansfixed rate is the best choice for them. With that out of the way, whatwe're looking to find here is the best way to lower the interest rateon your mortgage. And that definitely means adjustable rate. Adjustablerates mortgages are nearly always lower than fixed rates, just take alook at what your local bank will offer you. Over the life of yourmortgage that adds up to serious money, and personally I've alwayshated paying too much!
About the Author: Gus Benson runs http://www.mortgage-content.com, a website dedicated to information on mortgages, home loans and interest rates. Click to visit his site: http://www.mortgage-content.com
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