The mortgage interest rate has drifted near historic lows in current years but these changes may be on the distance. According to Federal Reserve, they are thinking of increasing the short-term interest rate it controls this coming June in order to send mortgage rates towards higher again. But currently, the rates are favorable to a lot of homebuyers. A year ago, the national average rate is about 4.28 percent but the 30-year fixed mortgage fell to 3.75 percent. This is indeed good news for a lot of homebuyers who despite the signs that the economy is recovering is always finding ways to save money.
However, landing to a more affordable mortgage be it a guarantor loan UK or other kinds of loan does not only depend on having the lowest rate. This also includes many factors because the rate of borrowers are qualified to avail such as their finances, credit score and the amount of down payment that they are planning to make.
The chief financial analyst at Bankrate.com Greg McBribe said, “As rates go up it will affect affordability.” “But rate is not going to be your only loan consideration. You don’t buy a house because of low interest rates any more than you get married because of a sale at the bridal shop.”
These are some consideration to get the best deal on mortgage:
1. SIZE UP YOUR CREDIT
There are three factors that the mortgage lenders consider for them to decide what rate they can offer to a borrower. Good credit, proof of income and size of down payment.
2. SHOP AROUND
You need to ask a lender to assess how much you can possibly borrow, so that you can begin a home search that will suite to your budget. There are many lenders out there, but for you to avail more favorable mortgage deals try to compare each lenders loan terms.
3. KEEP AN EYE ON FEES
The annual percentage rate is very important when you make comparison for a mortgage. It includes the necessary fees that charged by a lender. Bear in mind that the fees are not yet fixed until your interest rate is locked. It will be when you have already passed all the requirements.
If you could show quotation from other lenders there’s a chance that you can negotiate of the reduction for the several fees.