Thursday, 10 October 2019

How To Get The Best Mortgage Interest Rate

Best Mortgage Interest Rate

In this article, I am going to talk about getting the best interest rate on a home loan. I am going to go over two important tips that you really need to know about, they are probably more important than the interest rate that you are going to get. 

Before I start talking about how to get the best interest rate for a home loan. I want to go over 2 things that are going to be really important, maybe even more important than the interest rate that you are going to get, at least initially.


1. Choosing The Right Lender

It's about getting the right loan office because if you hire a loan officer, you need to make sure they know what they are doing, they are knowledgeable, they understand things, they are looking out for your best interest, they are going to close the deal on time. You want to make sure you choose your loan officer in your lender very carefully.


2. In The Right Loan Program

Because at the end of the day if you are in the wrong loan program it doesn't make any difference in the interest rate. 15-years, 30-years.

A good loan officer will talk to you and say, tell me a little bit about your situation, how long are you going to be living in the home, are you going to be buying the home, or you are going to be renting it out, are you going to be relocating in 5 years? Whats is your situation.

Base on your situation, they would put you on a different loan program, maybe on the 30-years fixed or a program that is amortized in 30-years, and of course, the interest rate would be a lot lower. There is a different loan program, it's not always about the interest rate.

Let's talk about the interest rate.


Knowledge Trust

You are choosing what lender to work with, you want to get the best interest rate, the first thing before anything else is to make sure you pick a loan officer that knows what they are doing and you could trust them. Because nothing else matters if you don't have that.

What you want to do is you want to go to 3 lenders, maybe you go to a mortgage broker, or a bank or credit union, whatever. And what you want to do is you want to make sure you have given them all the exact same information and you are calling them at about the same time on the same day. becuase depending on what is going on, the interest rate could change from day to day slightly.

Maybe you call one company and you call them 8:30 in the morning and they haven't gotten their rates for that day, but then you call the other two maybe later in the afternoon, so, you just want to make sure you call them in about the same time.

You want to make sure the type of loan is the same, if you are going on to conventional or FHA, VA, USDA, whatever you are going on, they all know that you want to give them the same loan amount, so, if you are $260,000, they all at $260,000.


Get a 30 Days Quote

But where most people miss it, most people don't think about talking of days that the interest rate is a lock, and that is vitally important

Typically most lender just a regular quote without the buying saying anything should be quoting a 30-days lock. But some of them don't, because in a 7 days lock, there is going to be less liability for the bank or whos is ever lending the money, the longer you go, the more liability, so, the interest rate will go up slightly.

There is going to be a good size difference between interest rates on a 7 days lock and a 60-day lock. If you think you are going to be closing in maybe 45 days out, make sure you tell them all, you want a 45-day lock.

That is really important. And then what you do is you get the information back and you have to look at it very closing, because look at banks, bank is typically a little bit higher on interest rate but less in closing cost, were there a broker, sometimes a credit union they have a lower interest rate but their costs are a little bit higher.

Just look at all of it and figure out the person who you feel the most comfortable with. The person you want to work with and go with and then see if they are the lowest, if they are not the lowest then give them the opportunity to compete, take the other two or the other one and then give them the estimate, it's called a lender estimate, and send them the estimate and say hey, can you meet or beat this? And see what they have to say.

This is going to be a win-win, you can't a loss in this situation.

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