Leave a Message

Thank you for your message. We will be in touch with you shortly.

Finding the Best Interest Rate on a Mortgage

mortage rismedia February 2, 2024

Finding the Best Interest Rate on a Mortgage

Mortgage brokers and other real estate experts can often help home buyers find the best interest rate on a mortgage that fits their needs, but that doesn’t mean borrowers shouldn’t shop around so that they’re well-informed before talking to an expert.

Here are a few things consumers can do to get the best interest rate on a mortgage:

Fixed vs. Adjustable
Fixed- and adjustable-rate mortgages are the two most common forms of mortgages. A fixed rate is set for the life of a loan, usually 30 years, and the mortgage payment is the same every month.

An adjustable-rate mortgage, or ARM, has an interest rate that changes after a certain number of years. It can remain at one rate for a year, then change based on an interest rate index chosen by your bank. An ARM can also be steady for five to 10 years, and then adjust annually.

ARMs usually have lower interest rates than fixed mortgages and can help people afford homes if they only plan to live in them for a few years.

Pay points
Paying what’s called a “point” through an upfront fee can lower the interest rate on a home loan. One point equals 1 percent of the total mortgage amount, lowering the interest rate by a fixed amount, usually 0.125 percent.

If you plan on staying in a home for a long time, paying points can save you money. You just need to do the math and determine how many months or years in savings it will take you to recoup the amount you paid in points.

Qualify for loan programs
Some loan programs have lower interest rates for eligible borrowers. These include VA loans for military veterans, FHA loans approved by the federal government, USDA loans, and other government programs for first-time homebuyers.

If the interest rates aren’t as low as you’re hoping for, these programs can still offer savings with low down payment requirements, protections if you fall behind on a mortgage, and allow low credit scores to qualify.

Improve your credit
Having a high credit score is one of the best things you can do to qualify for a better interest rate.

In the months before applying for a home loan, pay your bills on time and pay your credit card balances in full. Also, be sure to check your credit report for errors and dispute them.

Recent Blog Posts

Stay up to date on the latest real estate trends.

FLOORS

Should You Replace Your Carpet with Tile Flooring? Here’s What You Need to Know

Is Tile Flooring the Best Option for Your Home? Weigh the Pros and Cons Before Making a Decision

SECONDARY LIVING

How to Design an In-Law Apartment That's Safe for Your Aging Parent

Essential Tips for Creating a Comfortable and Secure Space for Your Elderly Loved One

ELECTRICITY

5 Common Misconceptions About Electricity Usage: How to Save Big on Your Utility Bills

Clear Up the Myths About Electricity and Learn How to Cut Costs with Simple Adjustments

CREDIT CARD

Why Keeping a Seldom-Used Credit Card Open Can Benefit Your Credit Score

Learn How Keeping an Inactive Credit Card Open Can Improve Your Credit Health

DRIVEWY

Should Your Custom Home Have a Circular Driveway? Pros, Cons, and Design Tips

Learn how adding a circular driveway can enhance your home’s curb appeal, improve parking, and elevate its value.

Gutters

How Gutter Guards Can Boost Your Home's Value: Protect and Save

Discover How Installing Gutter Guards Can Enhance Your Home’s Curb Appeal and Reduce Maintenance Costs

House Warming Party

Tips for a Successful Housewarming Party: Celebrate Your New Home in Style

From choosing the perfect date to entertaining guests, these housewarming party tips will help you host a memorable event that showcases your new space with ease.

Flooding

What to Do If Your House Floods During a Storm: Key Steps for Protecting Your Home and Family

Stay Safe and Secure: Essential Flooding Steps for Homeowners in North and South Carolina

First Time Homebuyers

What to Consider as a First-Time Homebuyer: A Complete Guide to Making Smart Decisions

Your First Home Purchase Doesn't Have to Be Overwhelming: Key Factors to Guide You

Work With Us