Shop around to Get the Best Mortgage Interest Rate

A Home Buying Article Contributed by Elizabeth Fox-Wise

The Mortgage Interest Rate is at an All Time Low

The interest rate is favorable for home mortgage seekers. The Federal Government has dropped the interest rate several times over the last year. When the Federal Government drops Interest rates, this means that they are loaning money to lending institutions as a lower rates. Therefore, lending institutions lower their mortgage, and other loan, rates to the consumer.

Because the mortgage rate is at an all time low, this is a great time to seek a first mortgage for a home purchase or to consider refinancing your home mortgage to a new one with a lower interest rate.

However, just because the mortgage rate is down, does not mean that you should take the first offer of a mortgage rate. The mortgage rate will vary from lender from lender. Furthermore, the same lending institution will offer various rates depending on the terms of the mortgage, the re-payment period you choose, and how many points you are willing to pay at the time of closing.

Compare the Offered Mortgage Rates before Deciding Which is Best for You.

A thirty year fixed mortgage is currently averaging around six percent. However, you can find offers of thirty year fixed mortgages that will vary up to a percentage point.

If you know what type of mortgage you want (fixed or variable) and you are sure about the length of the mortgage you want (20 year, 30 year, etc) then it is just a matter of comparing one lender to the next to find the one which will make you the lowest mortgage rate offer. Most lending institutions advertise their current rates and a quick search on the Internet will provide basic information on mortgage rates to help you make your comparison.

If you do not have a preference over mortgage type and length, then even more mortgage rate options are open to you. Typically, a Variable mortgage will come with a lower interest rate offer than will a fixed mortgage. The drawback here is the variable rate mortgage is exactly what it says - variable. The rate will change and could go up.

Accepting a Mortgage Rate Does Not Have to Be a Lifetime Commitment

Once you have reviewed the various mortgage rates being offered to, then go ahead and choose the one that sounds best to you. Even if you choose a fixed rate mortgage where the interest rate will stay the same for the entire life of the mortgage, you do not have to keep that mortgage for the full twenty or thirty years, or whatever term that you chose.

Should mortgage interest rates go down considerably in the future, you always have the option of refinancing your mortgage at a new, lower, interest rate. However, because a refinance mortgage will carry the same fees and expenses that you paid on your initial mortgage, it is always best to shop around and get the best interest rate that is available to you are the time that your purchase your home.