Buying a Home: Mortgage Rates
If you are considering buying a house in Birmingham, there a few things you need to know about mortgage rates.
Looking to purchase your dream home? Learn more about mortgage rates – a lower rate will save you a ton of money over the course of your home loan.
#1 Current Mortgage Rates are Down
It really is a buyers’ market right now when it comes to mortgage rates. After several weeks or rising mortgage rates, the rates are once again going back down. Current rates are below 4% for a 30-year-fixed-rate loan, which makes this a great time to buy a house!
For example, if you finance $250,000 for 30 years with a fixed mortgage rate of 4.0%, you will end up paying over $179,500 in interest over the course of the loan. The same situation with a 4.5% interest rate, you will pay over $206,000 in interest over the same time. That 0.5% interest will save you over $26,000 in interest!
In short, looking to buy a home? Now is a great time to buy because interest rates are still low. The lower the interest rate, the more money you save on interest and the lower your monthly mortgage payments.
#2 Prime Borrowers Get the Best Rates
A prime borrower is one that pays at least 20% down on their home, has verifiable income, and has a credit score of 740 or higher. If you meet these 3 criteria you will typically get the lowest mortgage rate available.
If you don’t meet these 3 conditions, don’t be discouraged! Many times you can lock in a rate that is only slightly higher than the ideal rate, still allowing you to save a significant amount of money on interest over the course of the loan.
Furthermore, there are special loan programs available for certain situations, such as first-time home buyers. Work with your lender to determine the best program and mortgage rate for your specific situation.
#3 How to Get a Better Mortgage Rate
A good place to start when trying to get a lower mortgage rate is cleaning up your credit. About a year to six months before you decide to start looking for your new home, obtain a copy of your credit report. Learn more about how to get your free credit reports at the Federal Trade Commission website.
Make sure all of the information is correct and address any inaccurate information. If your score is lower than desired, start working to improve your score!
Also, don’t be afraid to shop around. Mortgage lending is a competitive business. Get multiple quotes before deciding on a lender!
Need Help Navigating the Home Mortgage Process
If you are buying a house in Birmingham, AL and need the expertise of a professional, contact ARC Realty.
Our real estate agents are familiar with the current rates and can help you find a new home and connect with you great lenders in the area!
