Tips to Low Mortgage Home Loan Rates
Are you looking for low mortgage interest rate in 2015? You can still do it, but keep in mind that the clock is ticking. Right now, rates are amazingly low, so don't miss out. Here's how you can get low mortgage interest rate.
1. Get Your Ducks in a Row
What this means is document your finances. Keep good records – tax returns, bank statements, investment accounts, and details on your assets.
2. Lock In
In 2018, the Federal Reserve will likely reduce the pace of the current economic stimulus. This is what has kept the rates low, so as soon as you feel good about the numbers, lock in.
Refinance if you can. Remember when the mortgage interest rates jumped in 2013? A lot of homeowners missed the boat, and they're still paying over 5% interest on their mortgages. You might not be able to save by refinancing, but it won't do any harm to at least try. Talk to your loan officer, and see if it makes sense - consider closing costs, though.
4. Know Your Rights
This year, new mortgage rules are being created under the auspices of the Consumer Financial Protection Bureau. Check out for mortgage interest rates.
Lenders are going to be competing fiercely in 2015, and that means that buyers have the advantage. So don't be afraid to shop around for home loan interest rates.
6. Avoid Overspending
Is there not much money left at the end of the month? Stop that. Even in a borrower's market, lenders don't want to deal with people who have precious little once they've paid off their student loans and credit cards.
7. Don't Over-Use Credit
No credit? Forget it. That's always been the case, and it's not going to change in 2018.
8. Consider the Alternative
Think about alternative mortgage possibilities, like ARMs. If you're planning to stay in your home for 7-10 years, you might be able to get lower mortgage interest rates with a seven or ten year ARM, as opposed to the usual 30-year fixed rate mortgage. On an adjustable mortgage, home loan interest rates can be up to one per cent lower than it is with a fixed rate loan. Even if you're not sure how long you'll be keeping the house, a fixed rate loan can be the better course of action.
A homeowner planning to keep a house for 7 to 10 years could take advantage of lower home loan interest rates by choosing a 7- or 10-year ARM instead of the 30-year traditional fixed-rate mortgage. Mortgage interest rates on adjustable-rate mortgages can be as much as one percentage point lower than on fixed-rate loans.
9. Don't Jump Into an FHA Loan
FHA loans have traditionally required a low down payment, and the underwriting standards have been a good deal less strict than they are with conventional mortgages. However, in 2018, FHA mortgage premiums are predicted to rise, and under the new requirements, the mortgage holder is required to have mortgage insurance for the duration of the loan. With this in mind, it might be better to consider a conventional loan before committing to an FHA mortgage.
If you're not quite ready, don't panic. Home loan interest rates will likely go up, but buying a home you're not happy with, or one that's going to cost you more in the long run, isn't a sensible choice. Buying a home is one of the biggest decisions you're ever going to make, so don't do it before you're ready.
You have a lot to think about. Mortgage interest rates are low right now, but they're likely to go up. If you're sure you're ready to buy a home, go for it. But if you're not, don't.