Buying a home is a very big deal and is among the biggest decisions and investments someone can make in their entire life. One of the greatest challenges facing those looking to buy a new home, especially their first home, is being able to afford it. Most people do not have the cash or liquid capital available to pay for a home outright so a loan of some kind is needed to finance the purchase. Loans made for the purchase of a home is commonly called a mortgage and must be paid back by the homeowners based on the agreed-to terms.
Banks are the most common lender to provide that loan but there are other sources people can use that are less common. Utilizing a bank housing loan calculator online can help you get estimates and a genial idea for what loan amount you may qualify for, what your interest rate will be, and what the monthly payments will be for your mortgage. You can find many examples of a bank loan interest rate calculator online and you can also find answers to common questions about bank loan or mortgage payment options as well!
When shopping for clothes, common wisdom holds that you should only purchase something if you absolutely love it. Unfortunately, you aren’t likely to fall in love with your home mortgage rates, and if you do, maybe you should find someone to talk to?
Now that the housing market has started to equalize following the achingly slow conclusion of the Great Recession, home mortgage rates are beginning to rise. So how can you be sure you’re really getting the best mortgage rates available?
Avoid these common money-wasting mistakes when trying to find a bank with the best home mortgage rates this year:
1. The 30-Year Mortgage
Over the last decade, nearly 85% of all home buyers went with the 30-year fixed-rate mortgage. In the first half of 2013, that rate jumped to 90%. Even though the vast majority of home buyers choose that plan, you probably have the option of selecting a shorter payback period.
The 30-year mortgage isn’t just the most popular, it’s also the most expensive. Because homeowners pay back these loans over the longest period of time, their payments are higher. If possible, a shorter payback period could reduce your overall payments.
2. Read The Fine Print
If an advertised deal sounds too good to be true, then make sure you’re reading all the fine print before making a commitment. Ask specifically for a complete breakdown of all closing costs and additional fees before you sign anything. The best banks won’t hesitate to provide a clear explanation of all costs upfront.
If a financial institution offers you “points,” or an upfront interest payment in exchange for lower rates, then calculate whether the deal is actually in your best interest. Higher upfront costs might not be cancelled out over time, making “points” a great deal for your lender.
3. Don’t Rush Into A Bad Situation, Take Your Time When Shopping Home Mortgage Rates
Ironically, financial experts say that rising home mortgage rate trends could actually increase demand in the home market, as buyers rush out to snatch up deals before home mortgage rates inch even higher. No one can tell the future. Ultimately, it’s in your best interest to ensure your financial health before shopping for rates.
If you delay buying for a year while you work on improving your credit score or saving up more money, then you could end up with much lower home mortgage interest rates a year from now.