Last year was a dream for homeowners and homebuyers who rushed to grab some of the cheapest mortgages ever. This is now changing fast as the rates are rising again and those who are still looking to make the most of the still not-so-steep rates must act immediately. We give you a lowdown on how you can make the most of the low mortgage rates:
Don't wait until tomorrow
Make hay while the rates are still low. Even though they are increasing on rising optimism about the economy opening up, they are still considerably low compared to what they were when the pandemic hit last year. If you are a first time home-buyer right now is still a good time for you to avail the low mortgage rates and save a great deal of money in the process.
Refinance
If you are an existing homeowner who bought a home when the rates were high you could bring down your monthly mortgage payment by getting a new mortgage at a low rate. However, you do need to keep the closing costs in mind. Closing costs are paid to your lender to process the loan and would usually cost 1 to 1.5% of the loan. And if it suits you, you could also take a 15-year mortgage term instead of the 30-year mortgage term, the former being cheaper. The monthly payment may increase or reduce, but you get to pay out your mortgage faster in the 15-year mortgage which means you would be paying less interest overall.
And if you are a student with a loan from a private lender you could also take a new loan at a lesser rate which will reduce your monthly payments. But again you may be charged closing costs or a fee to refinance your loan. So it is your call to think if refinancing is actually helping you save some money after paying off these costs.
Be a good borrower
Just as any mortgage loan you as a borrower should appear like a winning proposition to the lender. He/them must be able to think he can recover the loan amount from you in due course. So you need to have minimum debt, a good credit history, and proof of sufficient income as well. They also prefer borrowers who can give a down payment. All this ascertains to the lender that you are financially sound.
Look for the best lenders
You must shop around before signing up with any lender. Most borrowers apply at their own bank for a mortgage. But shopping for loans online, comparing rates offered by several lenders will help you determine the place where the lowest mortgage rate is available. While at it, do pay attention to mortgage points which refer to the fee you pay to get a lower mortgage rate. Every point is usually equal to 1 % of the loan amount and you would have to pay that.
Besides, it would be a smart move to get a pre-approval on your mortgage. If you have any queries regarding mortgages with low interest rates do not hesitate to reach out to us. We will be happy to help.