Mortgage rates can, and do, change every day. In this ever-changing industry, how can you find the best mortgage rates? Consider this a guide for making sense of all the information out there, and finding the right local mortgage rate for you.
This November, mortgage rates were the highest they’ve been in seven years, but the numbers are starting to creep back down. If you’re in the market to buy a home, this is great news! However, rates in certain markets and from different lenders can vary wildly, so it is important to shop around and find the best rates for you.
The Best Rates Come From the Best Lenders
When shopping for the best mortgage rate, it only makes sense to look to the best mortgage lenders. There are many different mortgage types available, so you should know what to look for. Is a conventional mortgage, with a higher down payment, but lower overall costs, best for you? Do you qualify for an FHA or VA loan? Know what type of loan you need, and the options available in your area for mortgage lending. Are you looking for a big, corporate bank, a credit union, or another type of lender? Often, the highest rated lenders, from any type of bank or institution, are a great place to start finding the best rates.
One easy way to lower your overall mortgage rate is to pay “points” up front. The system of points involves paying some of your interest in advance, and could possibly save you money in the long run. Each point is generally worth 1% of your total loan, and you would pay that amount at the onset of your mortgage instead of interest over the course of your loan, thus reducing your overall rate for your mortgage. Talk to your mortgage lender about your options for using points on your mortgage, and if this could save you money.
Getting the Best Mortgage Rate
There are a few easy steps you can take to get the best rate possible. One of the easiest is to check your credit score. Get your free credit score online, and make sure your credit is in the best shape possible, as this can give you the best chance of negotiating a better mortgage rate.
Lenders base your mortgage terms on your credit score, so make sure to take time to read through your credit report and improve your score, if possible. Paying your bills on time and paying down any credit card balances are easy ways to lead to steady credit score improvement. If possible, set aside as much as you can toward a down payment while you do your research and shop around. Having a larger down payment can save you on the cost of your mortgage, and possibly get you a better rate.
Fixed-Rate vs. Adjustable-Rate Mortgages
It’s helpful to know the difference between these common loan types, and what it means for your mortgage rate. In a fixed-rate mortgage, as the name implies, your rate is fixed and does not change for the length of your loan. This option is great for being able to accurately plan your budget, and knowing your exact monthly costs. However, if the market rates go down, you are still stuck paying the higher rate to which you agreed. This option can leave you paying more interest over the course of your loan.
On the other side, in adjustable-rate mortgages (ARMs), the rates and payments remain constant for a short term, but then can change as the market changes. While this can give you an affordable option to start with, there is a risk of the rates and payments creeping up beyond what you’ve budgeted for in the long term
Current Mortgage Rates
As stated previously, mortgage rates vary from lender to lender, can change even on a daily basis, and will depend on your personal credit history. As of this writing, the average mortgage rate was 4.06%. Average rates are currently low, spurring many people to think of home buying. You can search for, and keep an eye on, the live mortgage rates as you go through the home buying or refinancing process. Knowing the average current mortgage rates can inform your search, and negotiating power.
Seattle’s Top Mortgage Lender
Are you in the market for a new mortgage or refinance in the Seattle area? Sammamish Mortgage has been the established Seattle top mortgage lender since 1992. Family-owned and operated, Sammamish is here to get you on the path to your dream home, with the best mortgage options and rates for you. Contact us today to get started on the path to home ownership. Our best-rated and experienced team is ready to help you find your best mortgage rates.
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