Getting the best mortgage rate might save you hundreds of dollars over the life of your loan in today’s competitive market. Mortgage rates remain at near historic lows, making now a great time to buy a home or refinance your existing mortgage.
However, understanding what factors influence your mortgage rate is important so that you can get the best deal possible. Some of the most important factors include the size of your down payment, your credit score, and the type of loan that you choose.
Here are tips to help you get the best rate possible.
Get Pre-Approved Before Shopping for a Home
The first step to getting the best mortgage rate is to get pre-approved by a lender before shopping for a home. This will give you an idea of what interest rates you qualify for and how much money you’ll be able to borrow.
Additionally, being pre-approved will make you a more attractive buyer to sellers since they’ll know that you’re serious about buying a home and that you have the financing in place to do so.
Compare Mortgage Rates from Multiple Lenders
Once you’ve been pre-approved for a mortgage, it’s time to compare rates from multiple lenders. You can do this by visiting each lender’s website or contacting them directly. Be sure to compare rates, points, and closing costs so that you’re getting the best deal possible. Moreover, look at bmo interest rates mortgage.
Get Down Payment Assistance
If you’re having trouble coming up with a down payment, there are programs available that can help. The Department of Housing and Urban Development (HUD) offers down payment assistance through its Good Neighbor Next Door program.
This program provides loans of up to 3 percent of the purchase price of a home for buyers who are employed by a specific public or nonprofit organization.
Lock in Your Rate
Once you’ve found the best mortgage rate, it’s important to lock it in so that it doesn’t go up before you close on your home. Most lenders will allow you to lock in your rate for 30, 60, or 90 days. There may be a fee for locking in your rate, but it will be worth it if rates do go up during that time period.
Consider an Adjustable-Rate Mortgage
If you’re willing to take on a little more risk; you may be able to get a lower interest rate with an adjustable-rate mortgage (ARM). With an ARM, your interest rate will start out lower than it would with a fixed-rate mortgage.
However, it could increase after a certain period of time. This makes an ARM a good option if you think interest rates will go down in the future or if you only plan on staying in your home for a few years.
Shop Around for the Best Mortgage Rate
Getting the best mortgage rate takes work, but it’s worth it if you can save thousands of dollars over the life of your loan. Be sure to compare rates from multiple lenders and lock in your rate once you’ve found the best one. Hence, search for bank of montreal mortgage rates.
You may also want to consider an adjustable-rate mortgage if you’re willing to take on a little more risk.
Taking the time to shop around for the best mortgage rate can save you thousands of dollars over the life of your loan. By following these tips, you can be sure that you’re getting the best deal possible on your mortgage.