Are you a little dissatisfied with your mortgage rates? Well, it is not a bad idea to consider a relook at your mortgage to keep those rates low as interest rates can plummet to new lows or rise to new highs.
A smart customer is always looking for ways to keep tabs on mortgage interest rates and keep them low. However, while everybody would want to enjoy the lowest rates, the truth is that most of us do not qualify for a mortgage rate that low.
Buying a home is a major decision and investment in one’s life and thus should not be taken lightly. Keeping your homeownership costs under control begins with the strategy of keeping the mortgage and the interest rates low.
If one is not careful, when taking out a bank loan or mortgage, those rates can get higher than your current credit card rate and leave you in debt. At all times, you need to remain in better control of your debt, homeownership, and your mortgage and interest rates. After all, you would not want to find yourself in a vicious circle of debt.
The Mortgage Bankers Association report reflects that the availability of credit is tightening, but the upside is that those mortgage rates are forecast to remain low because of the Fed’s policy. So, why not take advantage of the scenario and look for ways to lower the interest rates on your new mortgage.
If you do happen to fall into mortgage or any other debt, your lawyer can use NetLaw.com.au to calculate the interest owing on your judgement. It allows you to enter the principal owing, and then gives a breakdown of the interest that accumulates over time.
Look farther and beyond
A good way to start for those who are shopping for rates is to look deeper and further and get different quotes. It is essential to get the quote from someone you trust or have known for some time. Get references from your friends, relatives, or coworkers. The lower you can push those mortgage rates, the more savings you will make in the long run and have better control over your homeownership costs.
Refinance your mortgage
If you already have a mortgage and feel that the interest rates are higher, you can always look for a new mortgage with a lower rate and cut back on those monthly payments significantly. The Federal Reserve states that the average interest rate for a 30-year fixed mortgage rate has been about 3.75% in recent months. Thus, if your current mortgage is about 6% or higher, you should certainly look at the option of refinancing your mortgage and lower the mortgage rate. You will not only increase your savings but also enjoy an improved credit rating.
Make some comparisons
Compare the markets and lenders and their interest rates. Shopping around and comparing can certainly help you find a lower mortgage and get a better deal. You will be surprised to find some major differences between rates among the leading mortgage lenders. Avoid the most expensive mortgage lenders such as Plaza Home Mortgage, Texas Capital Bank, Citizens National Bank, GMAC Mortgage. Some of the least expensive mortgage lenders include names like Provident Funding, New York Community Bank, PHH Mortgage, Chicago Mortgage Solutions, and USAA. It is seen that metro areas boast of a higher number of banks with lower rates. Keep those aspects in mind when shopping around.
Make a higher down payment
It is a good idea to save first and put more money down when purchasing a home. Banks look at smaller loans to carry less risk but charge a higher rate to make more profit. On the other hand, they look at jumbo loans in excess of $400,000 to carry more risk and place a higher risk on those too. Thus, one can certainly benefit from making a greater down payment and get a balanced spot between the two extremes.
Cust down on the length of the loan
Another good strategy to lower the mortgage rate is by shortening your loan. Typically, Americans consider a 30-year mortgage when buying a home. However, banks and financial institutions prefer those homebuyers who repay their loans quickly and incentivize them with lower rates. So, take out a 10-year or shorter-length loan as you manage to lower the overall cost of the loan and make some neat savings.
Always prefer a fixed-rate mortgage
When choosing a mortgage for buying a home, consider a fixed-rate mortgage over an adjustable-rate. While the adjustable-rate mortgage may save you money in the short-term, the costs will only add up in the long term. You never know when those interest rates might begin to climb and along with the market, and those mortgage costs might balloon up. So, it is safer to stick with a fixed-rate mortgage for the entire pay-off period. Consider refinancing to lock in a fixed rate if you have an adjustable-rate mortgage.
Consolidate the debt
Many homeowners often have different outstanding loans that they are paying off each month, and these may comprise auto loans, college loans, credit card debt, and more. The rates of these loans may be higher than the current market rates. A good way to lower those loans is by consolidating them to get a lower interest rate and reduce your expenditures each month. However, one needs to consult a reputed financial institution or advisor to lower the interest and get a competitive rate. You can take out a home equity line of credit if you own a home to consolidate your bills.
Get automatic payments for mortgage
Sometimes the simplest of tactics can work and help you save big money. Automatic mortgage payments will ensure that you not only pay those payments on time and are never late, but can also get a lower ongoing interest rate. All you need to do is ask your financial institution or bank if they offer the option of setting up automatic mortgage payments and keep the rates low.
Just keep the above tips and guidelines to lower the interest rates on your mortgage and look for effective paths to achieve financial independence faster. Be a smart and savvy homebound and learn those secrets to getting lower mortgage rates and make bigger savings.