How to Find the Best Mortgage

best-mortgage

If you are planning to buy a home for your family, a mortgage loan is the best option for you. However, there are so many types of mortgage loans that it becomes overwhelming for you if it is the first time that you are buying a property. There is no need to worry as you are not alone. You need to do a bit of planning and some homework before starting your search for the best possible deal. To get the best mortgage rates, you need to find out your requirements and then match them with home mortgage rates being offered by different banks. Find out your credit score and share it with several lenders rather than allowing them to conduct an inquiry on their own. This will prevent any lowering of your score if your application is rejected by the lenders.

Fixed rate or variable mortgage rate?

This is a puzzle that you need to solve before choosing one of these options. Fixed mortgage rates offered by banks are slightly higher than variable rates of interest .However, you never know if the variable rates will go up or down in future. You can opt for variable rates if you are borrowing money for a short time period but fixed rates give you peace of mind and you know your monthly installments over the entire repayment period. Do not forget to compare the home mortgage rates of different banks before finalizing the bank.

How much should I pay up front?

The amount of money offered by the bank can be up to 85% of the value of the property you are buying. However, it depends upon your credit score and history and your present income level. It is prudent to muster as much as possible through your own resources such as savings so as to reduce your equated monthly installments. You can know the amount of loan you are eligible for with the help of mortgage rate calculator that is available on the websites of various lenders.

What is the fee charged by the bank?

Banks normally charge a nominal 0.5-1% fee on the total amount of loan sanctioned by them to cover their administrative expenses. If you are looking for the best mortgage deal and you also have a good credit score, you can negotiate with the banks to waive off or reduce this fee that can run into thousands of dollars depending upon the amount of loan.

Is there a prepayment penalty?

If you have been reading mortgage news recently, you must be aware of the prepayment penalty that banks charge if you decide to finish off your mortgage by paying the balance amount in one go. Search for the best mortgage lenders and find a bank that does not charge a prepayment penalty.