When you are ready to take the next step with your mortgage, it can seem like there are a bazillion things to consider. There’s your down payment, closing costs, what kind of mortgage you want, and on and on.
But one of the most important considerations is what kind of mortgage rate you can get. Because where you live or buy will have an impact on how much you pay every month. Get ready with these things to consider when checking rfa mortgage rates today.
Research The Best Neighborhood
One of the most important factors to consider when checking mortgage rates in your area is where you want to live. You may want to be close to work or have a specific school district in mind for your kids. Or you and your family may want to live in a certain neighborhood, like one that is more family-friendly or has low crime rates.
This can help narrow down the number of lenders and rates you need to consider. You’ll also want to look at rates based on the type of mortgage you plan to get, i.e. a 30-year fixed rate or a 15-year fixed rate. Be aware that rates tend to be higher for a 15-year fixed rate than they do for a 30-year fixed rate.
Check Your Current Credit Score
You’ll also want to check your credit score as part of your research. The higher your score will get, the better rates you’ll be able to get. Factors that go into your score include payment history, the number of open accounts, the amount you owe, new credit, and the types of credit accounts used. Most lenders will pull your credit as part of the underwriting process.
Find Out What’s Included In The APR Rate
Some lenders will offer you a low initial mortgage rate but tack on a higher APR rate (Annual Percentage Rate). This can be very deceiving because the monthly payment amount will be lower at first, but in the long term you will end up paying more.
You may have to do some digging to find out what the APR rate is and what it’s based on. This can include looking at the other rates that exist today. Some lenders may also include a margin in the APR rate. This is extra money they make on your loan and is usually based on risk.
Ask About Prepayment Privileges
Some mortgage lenders will allow you to make extra payments. This can help shorten the length of your loan and save you money in the long run. If you’re able to make an extra mortgage payment every year, it can help you pay off your loan faster.
You’ll want to make sure your lender allows for prepayment privileges and that you’re paying the right amount each month. Lenders will allow for a one-time payment or additional recurring payments.
Look At The Mortgage’s Fine Print
Lastly, make sure you look at the fine print in the mortgage documents. This can include the type of loan you’re getting, the interest rate, and the term length of your mortgage. You’ll also want to be sure to understand any prepayment penalty. This is a penalty that some lenders will charge you if you pay off your mortgage early.
