Mortgage rates have been reaching record lows since the beginning of the year and those who are looking to buy a property, be it their first or second homes, can benefit from the low interests.
While the record lows can already give you savings in the long run, there are still ways on how you can further lower your mortgage interest rates and benefit more from the current trend. Realtor.com listed some factors a homebuyer can consider that can give one thousands of dollars of savings from paying mortgages.
According to the real estate site, a borrower should consider which mortgage type is appropriate based on his financial circumstances. For instance, a fixed loan rate has an interest rate that remains the same throughout the duration of the loan. On one hand, an adjustable-rate mortgage can be more beneficial to someone who only plans to stay at a home for, say, five years. ARM provides interest rates that are usually lower than fixed-rate mortgages, fixed for an initial period of five to 10 years before they are adjusted based on market indexes. Realtor.com said that when you sell your home by the time the initial period of fixed rate ended, you can avoid the changes in mortgage rates.
The outlet also said to consider whether you are qualified for a special loan. There are more housing loans available for homebuyers with little to no money to put up the usual 20 percent deposit. Realty Today rounded up three of them.
If you have low credit score, it can also affect the interest rates offered to you. Ask if your loan officer can help you clean up your low score so that you can avoid getting high-interest rates. Your loan officer can give you an advice on how you can address the low-credit score concern.
