4 Questions on the Lowest Mortgage Rates in Houston
You want to get the lowest mortgage rate for a home loan. Well, you are not alone; all homebuyers want the same thing. But how to get the lowest rate and save a decent amount over the life of the loan? Well, it is not difficult. Making careful steps can help you with this.
But before you go forward with the lowest rate, you can have some questions on the lowest mortgage rates in Houston. Looking for answers? Here are these –
- Fixed-rate or ARM – which one to go?
Mortgages come with either fixed interest rates or adjustable rates. With fixed-rate mortgages, you will pay the same amount over the life of the loan. This part of your mortgage payment, which goes toward principal along with interest remains constant throughout the loan term. But property taxes, insurance, and other costs can change based on the market condition.
The interest rate on an adjustable-rate mortgage can change with time. Generally, an ARM begins with an introductory period of certain years, and for that period your interest rate holds steady. After that, the rate can change. Generally, ARMs offer lower introductory rates, but these can rise when the introductory period ends.
- Does the down payment amount matter?
Government-backed loans have lenient down payment requirements. For example, for FHA loans, the minimum down payment requirement is 3.5%, while with VA loans, military professionals can get 100% financing. But to get the lowest mortgage rate, you need to focus on two things – your credit score and down payment. You should save as much as possible for the down payment and come with a good credit score. So, down payment size matters a lot.
- What are the closing costs?
These costs refer to the fees that are charged by the mortgage lender. Comprise various fees, along with the lender’s underwriting and processing charges, appraisal fees, and title insurance, closing costs, typically are about 3% of the purchase price of your home. And these are paid when you finalize.
- Can I opt for any first-time homebuyer programs?
Before settling on a home loan program, you should try to find out whether you are eligible for any special programs that can make home-buying less costly. Various states offer assistance to first-time homebuyers or the ones who have not owned a home previously. Each state has its own set of programs for home buyers. Many states offer down payment assistance and often combine it with good interest rates, as well as tax breaks.
Getting the best mortgage rate is not difficult when you focus on certain things like down payment and credit score. So, focus on these things and shop for lenders to get the lowest mortgage rate for a home loan.