3 Don’t s that Nobody Told You before Finding the Lowest Mortgage Rates in Houston
When everyone has been raving about historically low mortgage rates, should you also give in? Borrowers are rushing to purchase or refinance a loan that is affordable given their current financial situation. But have you noticed that some of the borrowers still managed to get lower interest rates than usual? Well, they must have used the essential tricks and tips!
Yes, there are plenty of uses to unlock the lowest mortgage rates in Houston and not knowing them will simply be a tragedy. If you manage to save thousands of dollars in your mortgage, you can garage a new car with the savings. Undoubtedly, there are multiple benefits of finding your path to an unbelievably low-interest rate which does not tag along with a few drawbacks. To know more about the uncomplicated ways to get a low mortgage rate in Houston, give the rest of the article a read.
Do not Overlook an Adjustable Rate Mortgage
No matter how much a 30-year fixed-rate mortgage is the talk of the town, you cannot possibly ignore an adjustable-rate mortgage. When you are not too sure about keeping the property forever, this loan option seems like a feasible one. The adjustable-rate mortgage can ensure a low mortgage rate for a particular period. For example, a 3-year ARM is fixed for 3 years and then begins adjusting solely dependent on the market condition at the time. The same rule applies for a 7- or 5-year ARM. After enjoying the initial rates, you can refinance or sell the loan right before the mortgage starts adjusting.
Do not Borrow a Huge Chunk of Money
Did you know the mortgage rate depends on the borrower’s LTV or loan-to-value? This is a ratio that draws a comparison between the mortgage amount and property value. Imagine, you bought a home worth $100,000 with a seventy-thousand-dollar loan, and the loan-to-value will be 70. As the low LTVs are scary for the lenders, you should take an effective decision. When your LTV is less than 80, you can choose not to pay mortgage insurance and save a few bucks.
Do not Go for a Small Down Payment
When the loan market is bustling with low down payment mortgages, you should do it differently. Instead of following the herd for 3.5% or 10% down payment, you must save enough for a bigger down payment. If you are thinking of 20 percent or greater, you are taking a step towards securing a low mortgage rate in Houston. Run outside and pause the gym membership for a while until you hit the (down payment) target, maybe? Even if you are willing to get an FHA mortgage, a 20 percent down payment will not be impossible. The lenders always appreciate the large down payments because this option reduces the risk when a borrower defaults on the mortgage.
When you are looking for a mortgage with a stellar credit score, there is a great way to grab low mortgage rates. If not, ask a plan from the lender and work hard. Remember, credit score remains a huge factor to the lenders for ensuring an affordable mortgage!
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.