How To Compare Mortgage Loan Rates
If you plan on financing your new home, learning how to compare mortgage loan rates is strongly recommended. Your mortgage rate will be determined by some factors. Nevertheless, it is wise to get some basic knowledge on different mortgage loan rates. My instructions on comparing mortgage loan rates will be your learning guide.
To compare mortgage loan rates, you will need:
- Internet access
- Mortgage professional
- Figure out the amounts for the loan and the down payment. If you have a house in mind already, think about how much you want to use as the down payment. In general, the down payment can be 5% or 20%. Depending on which loan program you go for, the down payment rate may vary. You only need to put 3.5% down for a FHA loan. No down payment is required for a VA loan. You can make comparing mortgage loan rates simple by knowing exactly what you want.
- Select the mortgage products that you want. Now, consider the length of the loan. The loan rate can be fixed for different number of years. Adjustable Mortgage Rate (ARM) is an alternative loan product. The last product comes with the Interest Only (IO) rate. Note that a 30 year fixed regular loan can have a very different rate than a 30 year fixed FHA loan. Also, the rate that you want can be affected directly by your credit score. The lower the credit score, the higher the interest rate will be. Write down all these products that you are interested in on paper. Search for a mortgage calculator on the Internet. Input all the information and then click calculate. Record the results for the products you inquire about. Now you can compare the mortgage loan rates to see which one will meet your need the best.
- Consult a mortgage professional. If you are having some difficulties on comparing these mortgage loan rates, you might want to have a discussion over this matter with a professional in the mortgage industry. A mortgage professional can offer you some in-depth information and opinions when comes to compare the mortgage loan rates. Plus, he or she can answer all the questions associated with getting a mortgage if you have any. You should do so if you are a first time home buyer. The whole situation will be beneficial to you.
That is it! Now you should know how to compare mortgage loan rates. Financing your first home will be less scary by having a clear understanding on the rate that you will get.