How to Search for the Lowest Mortgage Rate

Are you looking to purchase a new home or possibly refinance your current mortgage? If so, then you are probably wanting to know how to find the lowest mortgage rate possible. Lowering your existing mortgage rate on a refinance can potentially save you hundreds of dollars every month on your expenses. Being approved for a low mortgage rate on a new home will also go a long way in securing your personal finances. So how can you find the lowest mortgage rate available? Here are a few steps that can help you start your search.

Difficulty: Moderate

Instructions

1. Get a free credit report to determine what your credit score is along with any other person who will be added to the loan. Finding the lowest mortgage rate will depend on what your credit score is and how you have historically paid your bills. If you find problems on your report, start trying to fix the errors as soon as possible so your score improves.

2. Calculate the value of the home you are looking to purchase in order to find the lowest mortgage rate possible. Real estate agents should be able to help you determine the value of a new or used home you are looking to buy. If you need to refinance, then you can compare existing home sales in your immediate area or have your home appraised to determine it's current market value.

3. Search for the lowest mortgage rate online using various websites such as bankrate.com. Most of these sites will prompt you for your local zip code that will search for the top rates offered in your geographic location. You can also look for low rates through your local bank or other banks in your area.

4. Check with your credit union for help finding the lowest mortgage rate that is competitive with banks and other lending institutions. This is often an overlooked place to look for great mortgage rates that can really help you cut your costs. Most credit unions normally just require an initial deposit to be eligible for great rates!

Tips & Warnings

• Work to lower any outstanding debt while increasing your income to decrease your debt to income ratio.
• Watch out for high closing costs and points that could be added by a mortgage lender. Ask questions and make sure you understand what your lender is offering.