Getting the Best Mortgage Rate is Possible

A Home Buying Article Contributed by Robert Scalia

How to Transform the Best Mortgage Rate into the Best Possible Situation for You.

You've had the best mortgage rates in 15 years staring you in the face. Everyone has been telling you now is a super time to buy a home: Your parents, your grandparents and your girlfriend.

You've gone on the Internet, plugged some numbers into a mortgage calculator and have come to the conclusion that they are dead on. So you decide to take the plunge. You are ready to join the real estate mortgage, and now you want that best mortgage rate working for you and only you.

It sounds like you are off to a flying start. but your work is far from over.

You have to keep in mind that there are many factors that will affect what you thought was the best mortgage rate after you buy the house. Things like the amount and length of the loan, your income level and credit quality can all make a good mortgage rate seem like a bad idea 15 years down the road when the bills are still piling in.

So what can you do to make sure you get the best mortgage rate possible.

How Do All the Loan Factors Affect Your Shot at the Best Mortgage Rate?

Before you decide to sign on the dotted line, remember that the best mortgage rate isn't a given.

The amount of your loan, for example, can increase your interest rate. This rate will undoubtedly be increased if the financed amount exceeds the loan limits established by the likes of Fannie Mae and Freddie Mac. Check out this loan limit before you sign on that dotted line.

Remember that shorter loans can save you thousands of dollars in interest payments over the life of the loan. But while you will be saving in interest, taking out a 15 or 20-year loans means your monthly payments will be significantly higher. If you are set on this option, than you might want to consider an adjustable rate mortgage. If the interest rate is low, this is a far more effective way to get yourself off on a good foot.

Getting the best possible mortgage rate will also entail you making a down payment greater than 20 per cent. This simply won't be the case if all you can only afford are down payments of 5 per cent or less. And if you happen to have the cash when you decide to take out your mortgage, paying the points on your loan right way will lower your interest rate.

How Credit Can Be Your Worst Enemy When It Comes to Getting the Best Mortgage Rate.

Your credit quality and debt-to-income-ratio can be the barrier between you and the best mortgage rate out there.

If you're credit happens to be good and your monthly income greatly surpasses your monthly debt obligations, things are looking good though. But if your monthly income barely covers your debt obligations, you can kiss the best mortgage rate available good bye.