In getting a mortgage (or any loan for that matter), it’s safe to say that everybody wants the lowest rate possible. Unlike one-time purchases, a home loan can span up to 30 years, which means your decision now will have a profound effect on your pocketbook for an extremely long period.
But as you shop around for the best mortgage rate in Utah (most likely from AltiusMortgage.com), Delaware, or Mississippi, it pays to step back and put things into perspective — what kind of rate exactly you looking for? Is it necessarily the day’s lowest in the rate sheet? Or there’s something more to look into?
Fees and Costs
The collective payable amount to make your mortgage possible comprises more than just the principal and the interest. Other than these two financial elements, there are services you’re expected to shoulder to get the loan started and closed, which go to certain professionals. Also, some mortgages require zero down payment, or just a comparatively small amount.
Apart from your monthly repayments, you have to balance all the applicable fees and closing costs to see if your deal is actually favorable. In addition, all charges are negotiable; you may even demand not to pay them if you have excellent credit and a stable income.
Interest Rates Constantly Change
Mortgage rates change daily, and sometimes get updated more than once a day; except on weekends, which is why the price difference between Friday and Monday could be huge. Because of this volatility, you must monitor the pricing regularly, and not just rely on the figures you saw two days ago.
Once a lender quotes you a mortgage rate, it doesn’t mean it’s final. You must first receive a written confirmation from the lender stating the amount to lock it in.
Low Rates Can Still Be Lowered
Buying down your interest rate is an effective way to have a low rate over the long term, in exchange of one-time fees. This may be the sensible route to take if you intend to keep the mortgage for several years, but not if you plan to refinance down the road.
There’s no straight answer to whether you should buy down or not, so you must put a lot of thought on it.
The best mortgage rate is relative. You can’t find it by just shopping around, but rather by exactly understanding what’s perfect for your financial situation now and in the foreseeable future.