How to Get the Best Mortgage Rates

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By cadence
User-Submitted Article

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Hold on to your money. Don't spend it all on your mortgage.

Are you in the market for a new mortgage? Getting the best mortgage rates is important for your financial security and comfort. Make sure to do your research before choosing a mortgage and a mortgage company, or you may regret your decision in the future.

Difficulty: Moderate

Instructions

Step 1

If you are able to buy a home during times of economic turmoil, buy at that time. Mortgage rates will be lower as the real estate industry struggles.
Step 2

Check mortgage rates daily. Interest rates fluctuate frequently. By waiting a few days before locking in your mortgage, you may save yourself a lot of money in interest each month.
Step 3

Choose a mortgage company who lets you lock in a lower rate once you commit to working with them. For example, Wells Fargo will give you a lower interest rate within thirty days of locking in if mortgage rates drop more than half a point.
Step 4

Improve your credit score. This may help you obtain a mortgage with a lower interest rate. Doing this may delay the purchase of your home, but can create a huge difference in your mortgage rates and fees.
Step 5

Stick with a fixed rate mortgage and avoid adjustable rate mortgages. Don't automatically expect that you'll be able to pay higher amounts in a few years. A fixed rate mortgage will let you plan a mortgage payment budget for the life of your mortgage.
Step 6

Put more money down. If you have less than twenty percent down, you may have to pay PMI, which is Private Mortgage Insurance. This is purely for the benefit of the bank, but comes out of your payments. Also, putting more money down will keep you monthly payments reasonable, and if you have a great interest rate on your mortgage, it may not be wise to refinance.
Step 7

Avoid points. Paying points when you initially get your mortgage may seem appealing, but then you're technically just paying more upfront, with takes money away from your down payment. Also, if you only plan to live in your home for a short amount of time, you may actually lose money by paying points.
Step 8

Ask for fee discounts or removals. Certain companies will be willing to remove fees in order to get your business. Additionally, some companies, like Bank of America, offer a no-fee mortgage if you meet certain terms and conditions.
Step 9

Choose homeowners insurance with a higher deductible. If a small item breaks, and you can cover the cost of replacement, then keep your deductible higher and save money each month.
Step 10

Refinance your mortgage, if necessary. As we have seen recently, interest rates have been dropping like crazy. If you can refinance and get a significantly better rate, go for it! The initial hassle will save you money in the long run.