Need a good lender - check out Premier Capital Mortgage and Joe Farro's team of experts. This is a recent email Joe sent out to keep folks informed:
Shopping for a Low Interest Rate
Buying a home is likely the biggest purchase you will make, and even more likely a purchase that will require a loan. When dealing with a financial commitment such as this, understanding how to get the lowest possible interest rate could mean a difference of thousands of dollars. Home loans are a complicated business, so here are a few tips to help you shop for the lowest interest rate.
Qualifying for the Lowest Rates
Computer models fix a large percentage of the costs of a home loan with strict prequalification. Loan officers are not able to give every client that walks in the door the same deal. It is a good idea to be aware of your own credit score and equity, while also comparing rates in your local market, so you know what to expect.For the best interest rates you'll likely need a credit score of at least 740 and have 20 percent equity. These figures are a general guide and are always changing. However, if your score is considerably lower than this and you have low equity, be prepared for heavily increased rates compared to the best that are offered.
Be Prepared
The best thing you can do for yourself to make the loan process easier is to plan ahead and be prepared. Be sure to gather all the necessary documents before you begin; to ensure timeliness and organization. You should also prepare for the down payment by saving up monthly. Depending on the lender and type of loan, you may be required to put anywhere from 2.25% to 20% of the purchase price down. In addition, keep in mind the estimated closing costs, as many tend to forget to budget for these fees. It’s never too late to start saving.Another factor to consider is home insurance costs. If insurance costs for your area are particularly low, it may free up some additional cash for loan repayments. Tools like the home insurance calculator allow you to plug in all of your information to get an estimated cost for your home insurance.
Understand your Needs
Before going to speak to anyone about getting a home loan, be sure you are clear about what it is that you're looking for and what parameters you have set. If for any reason they can't be met, be cautious of alternative offers that are suggested to you, as you may be persuaded down a different path.Looking Will Lead to the Right Rate
There’s no easy way around it if you want to find the lowest interest rates on a home loan. You have to spend a long time looking, and you need a strategy. It may not be something you're particularly interested in but if it saves you a large sum of money, it’s worth it.You must compare similar policies; otherwise you're wasting your time, as a sensible comparison is almost impossible. Consider the closing costs, interest rate, and lock period to ensure that they are comparable offers.
Move Quickly
As they say, time is money. Be sure to respond promptly to your lender if they require any additional information from you so you can keep the process moving.If you've managed to find a great deal on your home loan, waiting around for ages while you try to better it or find the equity required to close the deal, is likely to end up costing you. Shopping around is certainly in your best interest. However with today’s market on the rise, rates are not likely to stay stagnant. So if you find a great rate that fits your needs don’t wait long to close it.
Also look into getting prequalified for a loan. This process is rather simple and can put you in a much better place to buy, as well as give you a great idea as to what you can expect to borrow.
Taking out a home loan is one of the biggest financial commitments you are likely ever going to make. Make sure you put in the time to do your research and look around for the best possible deal.
