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Low Mortgage Rates Make This a Good Time to Buy a Home

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Given uncertain economic conditions, many people believe that buying a home is no longer with in their reach. But they could be wrong. With long term home mortgage rates falling as low as 3.31% in 2012, this is actually a good time to buy a home. A reliable firm of direct mortgage lenders can not help you find low interest home loans, they can also help you with other financial services such as refinancing a loan or consolidating debt.

Home buying 101: A good credit score

In general, according to the Home Loan Learning Center, the majority of commercial mortgage lenders will not approve jumbo loans for people with a credit score of less than 680. For FHA mortgage loans, a minimum credit score of 620 is needed. Buyers should also expect to have to make a down payment of around 3.5% of the value of the home, though this might vary a little for different direct mortgage lenders.

Sometimes, buyers can make up for a low credit score by making a larger down payment. In general, though, it is a good idea to maintain a good credit score. This involves cleaning up credit history and making sure that any errors are corrected by credit reporting agencies.

Making the mortgage process easier

In the world of home buying, low rate mortgages are the Holy Grail. When looking for home loans, finding good mortgage rates is key. Experts advise that buyers should lock in a rate as soon as they are find the numbers they are comfortable with. Financial experts also advise that total household monthly debt payments, including mortgage payments, should be around one-third and no more than 36% of gross monthly income.

Getting a good mortgage rate is only the first step. Buyers should keep in mind that there will be costs like closing costs; they may also be called upon to pay for points. It’s a good idea to hold off on any other major expenses when buying a home. Experts also caution that any changes in employment status or income can delay or even half the mortgage process. So it’s best to stick with your employer until the contract is signed.

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3 Things You Should Think About to Get a Great Mortgage Rate

Mortgage rates in tennessee

Getting the best possible mortgages rates isn’t easy, but it can be done. Here’s what you need to know.

What type of mortgage you’re going to get. – There are two different types of mortgages: fixed rate mortgages or adjustable rate mortgages. The former locks you into an interest rate that you’ll pay over the course of the loan’s term. The latter’s interest rate fluctuates, as you might expect, and they usually offer lower introductory rates. However, it’s important to really remember that the interest rate can and will change eventually later on.

Whether you’re going to pay for points or not. – Points are basically upfront fees — one percent of the total mortgage amount — that’s paid to lower the interest rate by a fixed amount. Paying for points is a good idea if you’re going to be paying the loan off over a long time. However, upfront costs often outweigh these savings further on.

Whether you qualify for a special program. – You might be eligible for a special program that can make the house-buying process more affordable, which is why it’s a good idea to think before you buy. Some of the programs that you might qualify for include VA loans, FHA loans, USDA loans, and first-time homebuyer programs. Look into these options, and you may find yourself with in a better place to get great mortgages rates.

Getting home mortgage lenders to give you great rates isn’t easy, and the myriad of different factors — like the different types of mortgages or the difference between high versus low deposit home loans — doesn’t make it any less difficult. Nevertheless, you can get great home loans rates if you’re willing to put in the work.

If you have any questions about mortgages rates, feel free to share in the comments.