mortgage tips

Expert mortgage tips to guide you with your money.

Finding the Current Mortgage Rate

Mortgage shopping can be really frustrating. The rates change constantly; the refinance programs are always evolving and it's hard to be sure you have the most up-to-the-minute information. Read as much as you can about interest rates and the American economy. Look at sites like Bankrate.com to get information about mortgage rates and the low rates for the day. You can also check your local newspaper for local, up-to-date information. Make smart decisions about your long term financial goals, both in real estate and otherwise, by being informed.

The Optimal Way to Lower Mortgage Rates

Everyone wants to save money and make their money work harder for them. That is one reason why refinancing has been such a popular activity for homeowners in the United States recently. People are saving thousands of dollars each year by reducing their mortgage rates. Some homeowners have even refinanced multiple times to taking advantage of constantly falling interest rates. If you tried this yet, it's not too late. You probably won't find interest rates as low as a year ago, but they are still much lower than they have been in the past. Find the lowest mortgage rate by shopping online with various mortgage brokers.

How to Research Refinance Rates

Have you been part of the refinance frenzy that has fascinated the US in the last five years? If not, you should consider it. Refinancing for lower mortgage rates has saved millions of homeowners billions of dollars. Most people take money out of their equity, but you can just save money or shorten the length of your loan. The interest rates are really the driving force of the refinance trend. If you want to find out what the current refinance rates are you have a couple of options:

  1. Check the internet. Many sites list current refinance and mortgage rates free of charge and many of them even offer a refinance or mortgage quote at the same time.
  2. Check your local newspaper and stay informed of any major interest rate fluctuations.
  3. Develop a long term relationship with a mortgage broker. Mortgage brokers will call you when there is a change in the interest rates or a new program that might fit your refinance requirements.

Rate & Term Refinancing Rates

Rate and term refinance is when you refinance simply to change the interest rate and the term of your mortgage. You aren't pulling out any cash or equity. You are negotiating a better deal for yourself. Your new interest rate will be determined by how much money you are borrowing and for what length of time. Mortgage companies use a formula called a 'loan to value' ratio to calculate this. As an example, if you had an $80,000 home and an existing mortgage of $40,000, you would have a loan to value ratio of 50%. The higher your loan to value (LTV) ratio, the higher the interest rate.

Buy Down Mortgage Rates

If you come into some money, you may want to consider a buy down mortgage refinance. You simply use that money and to increase the equity of your home in one lump sum. By doing this you reduce your principal and you may be able to reduce your interest rate. Buy down interest rates will depend on the lender. So this is a situation where you definitely want to shop around. If you have the financial flexibility to invest in your home equity, it’s always a good financial move.

Negotiate for the Lowest Mortgage Rate Possible

You can negotiate with your mortgage broker on fees, interest rates and programs. A mortgage broker receives a commission based on how much a bank is willing to buy a loan from his company for – either it is a percentage or a flat fee. Sometimes the mortgage broker makes enough commission to pay for all of your closing costs and still net a solid payment. The best way to make this work for you is to let banks compete for your business. Work with more than one mortgage broker and play them against each other. This may be a little awkward if you're not used to doing it, but if you focus on getting the best deal possible, it can work.

Don't Get Greedy – Lock In The Current Mortgage Rate

When you are shopping around for a mortgage, don't wait too long for the market to change -- lock in that low rate as soon as possible. If you get greedy and wait too long, you may lose out on a full percentage point of savings or more. By using a mortgage amortization calculator, you'll see what this means to you over the length of your loan. If you've developed a trusted relationship with a mortgage broker, follow their advice. They want you to get the best deal possible so you'll come back to them in the future.

Cash Out Refinance Rates

What is a cash out refinance? This means that you refinance your mortgage for an amount higher than you currently owe, often for a different interest rate and loan term, which leaves extra cash for you. You are cashing out equity in your home for home improvement, large expenditures and even debt or credit card consolidation. This type of refinance will usually yield a lower interest rate than you could ever get from a credit card lender. Often, the loan programs will require the closing company to pay your creditors directly, and/or they may want evidence of home improvements, but it's worth it to get a much lower interest loan.

Refinancing Rates for Mobile Homes

Financing mobile homes is very different than a traditional home because mobile homes depreciate rather than appreciate. You may have trouble finding mortgage rates that are lower than your initial mortgage rates. You’ll need good credit and a stable income. If you look like a safe credit risk, you'll probably be able to get a lower mortgage rate. You may want to consider selling mobile home, and putting your equity into a traditional home with a more traditional rate of return on your investment.

Why do interest rates rise and fall all the time?

Real estate is an investment. When an investment is holding its value or rising in value, people want to put more and more money into that investment. If home values decrease, interest rates may rise because lenders won't want to put as much money in the real estate market. For those reasons, it is important to buy a home you can afford and one that will certainly appreciate in value. Refinance wisely and you'll be protected even if home values drop.