Mortgage Rates

Everyone wants to get the best rate for their mortgage. In theory getting the best mortgage rate sounds simple, but many factors go into getting the very best mortgage rate. If you have all of them you can get the best rate on your mortgage. If you are missing some than the interest rate on your mortgage won’t be as good. If you don’t have enough of them covered you won’t get a mortgage.

The most important factor in today’s mortgage market to get the best interest-rate on your mortgage is your credit score. Sometimes it is referred to as your FICO score. The better your credit score the better your interest-rate on your mortgage, plain and simple.

If you are thinking about buying a home the first thing you need to do is to call a mortgage advisor and have them run your credit report.  At anytime in the country it is estimated that more than half of Americans have erroneous information on their credit report. That erroneous information can cause your score to be lower which will give you a higher interest-rate on your mortgage. The time to get this erroneous information cleaned up is before you find a home a apply for a mortgage, because by then you may not have enough time to address getting the information corrected.

The next most important factor that will influence your mortgage rate is your loan to value or how much money you are going to put as a down-payment for your mortgage and purchase of the home. The more you put down the better your interest rate will be on your mortgage. To get the very best interest-rate on your mortgage you need to put twenty percent of the purchase price as a down-payment. You do get a better mortgage rate with forty percent as a down payment though that is unrealistic for most people obtaining a mortgage.

The last factor that can have an effect on your mortgage rate is what type of property for which you are going to obtain a mortgage. The single-family residence will get you the best mortgage rate. That’s because single-family homes have a higher consumer demand than other property types. Your mortgage rate will be higher if you purchase a condominium and typically you will have an even higher mortgage rate for high-rise condominiums.

The other category of property types that can influence your mortgage rate are if the home will be your primary residence, second home, or an investment property. When you buy a home that is your primary residence you get the best mortgage rate. Second homes can have a slightly higher mortgage rate depending on the amount of down payment, and finally investment properties carry the highest mortgage rates.

With all of these factors most rates you see advertised are just teaser rates and you will on get these mortgage rates if you have the best of each factor above. In addition, there are other factors to consider for mortgage approval.

The bottom line is never believe everything your read especially when it comes to advertised mortgage rates. The wise thing to do is to call a reputable mortgage advisor and discuss your unique situation with him so he can assist in getting you the best mortgage rates.

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