5 Mortgage Rate Facts You Must Know1/06/2011 Mortgage rates are a major part of any mortgage. If you’re a first time home buyer and you’ve never had to track mortgage rates or monitor the financial markets before, get ready. You’ll need to keep an eye on the mortgage marketplace and understand what your options are if you want to save money. 1. The mortgage rate on your mortgage is the price you are paying for the loan itself. It’s helpful to picture it this way. Interest isn’t something that lenders impose to take extra money from you. Rather, it’s the price of using money that technically belongs to the lender for your own purposes. 2. Not all lenders and mortgage brokers offer the same rates. This is the most crucial thing to understand about mortgage rates. Every broker you talk to will be able to negotiate a different rate. Again, rates are like prices. Different stores offer different prices, and it makes sense that different lenders would do the same. 3. Research can save you money. Take the time to conduct some research into what mortgage rates are available in your area. Compare the options offered by different lenders and pick the one that best meets your needs. In most cases, you’ll want to consider the top two or three lenders who offer you the lowest mortgage rates. 4. Mortgage rates are affected by the economy. When incomes are high and everyone wants to buy a home, mortgages rates increase. When the economy is slow, mortgage rates decrease. It’s as simple as that. 5. You can negotiate rates. Don’t forget this. You may be able to buy down the rate on your home purchase mortgage by paying points up front. If you’re getting a refinance home loan, you may qualify for a lower rate if you choose to place more equity into the home at closing. Analyze your options and talk to your lender about what you can do to secure the best deal. |
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