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Best Mortgage Rate Quote Tips   

Interest rates for mortgages, even bad credit mortgage loans, are very low which has been incentive for more people to buy houses or apply for a mortgage refinance.  Obtaining a low-interest mortgage is also easier for a borrower because banks are competing for their business. Here are a few tips for singling out the best mortgage rate quotes. 

 

The best mortgage rate quotes are given to the borrowers with highest credit scores.  These scores fall into the 740 – 800+ range.  To get the best mortgage rate, your credit needs to be stellar.  Anything less than a credit score of 740 means you will take a hit in interest rates.  You don’t have to have a lot of credit to get a high credit score. If you have revolving credit or credit cards, keep as much available balance open as possible, pay your bills on time, and over time your credit score can rise to these levels.    

 

Interest rates for scores less than a 740 are still only a fraction or two higher than the best rates.  Borrowers with a credit score in the range of 680 to 739 are still going to benefit from banks competing for their business.  The majority of people mortgage refinancing and buying houses have credit scores in this range. Mortgage rate quotes will be competitive, so shopping not only rates but lender fees, discount points and closing costs is advantageous to the borrower.  

 

Loan programs for people with credit scores in the range of 620 – 679 are going to take the biggest hits in rates.  Borrowers in this range may opt for an FHA loan because loan programs and rates are comparable to conventional loans, with more relaxed credit requirements.  For people with scores under 620, loan programs are almost non-existent.  

 

When comparing interest rates quoted by different lenders, be sure you are comparing apples to apples by comparing the lenders’ Annual Percentage Rates (APR). This is how to tell if a rate quote includes discount points, origination fee and other lender fees.  The APR rate also factors in closing costs. Comparing the APR rates rather than just a simple interest rate allows people to compare lenders’ rates in an educated way and confirms which quote is actually the lowest.  The lowest-quoted APR has the best mortgage rate over the life of the loan.    

 

To get the best rate quotes, it’s good to know that your credit score is a big determining factor.  Maintaining a high credit score is important for anyone wanting a mortgage and makes mortgage interest rate the lowest they can be.  With the variety of loan programs available and low interest rates, borrowers can choose which bank they want to do business with. 

 

 

  10 Steps to Home Ownership:

Step 1: Are You Ready?

Step 2: Hire a Realtor

Step 3: Get Loan Pre-approval

Step 4: Search for Homes

Step 5: Choose a Home

Step 6: Obtain a mortgage

Step 7: Make an Offer

Step 8: Insure Your Home

Step 9: Close the Deal

Step 10: Avoid Foreclosure

 

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