Finding the best mortgage rates for your financial situation will save you thousands of dollars in the long run, and it can save you hundreds of dollars each month. Finding the best mortgage rates will take some research but you will be glad that you did it.
How to Determine Your Credit Risk Level
Obtain a copy of your FICO score. You can purchase a copy of your FICO score on most credit monitoring company websites for about $10, and in some cases you can get it for free by signing up for a free one month trial of the company’s credit monitoring services.;
Evaluate your FICO score to determine what credit risk category you belong to. There are several credit risk categories that you can be placed in. The lowest category that mortgage interest rates are quoted for include FICO scores that range from 500 to 579. This is the high credit risk category. The remaining credit risk FICO score categories from highest credit risk to lowest credit risk are: 580-619, 620-659, 660-699, 700-759, and 760+.;
Use your credit risk category to compare mortgage rates from different companies.
How to Find the Best Mortgage Rates
Log on to the Internet.;
Search for mortgage companies. You can do this by targeting specific banks like Bank of America, or you can conduct a general mortgage company keyword search.;
Access information about mortgage programs. To do this look for the link on the website that accesses mortgage information. Here you will want to look for interest rate information. If the lender has a single rate listed chances are that this rate only applies to borrowers who have excellent FICO scores. If your FICO is less than perfect you will be paying a much higher mortgage rate than is listed.;
Request a mortgage quote from the lender. Make sure that you include your FICO score and any other financial information that may influence the type of loan that you will qualify for such as if you are self-employed.;
Contact your own bank to see what mortgage rates they can offer you based on your FICO score, your financial situation, and your history as a customer of that bank.;
Contact other local banks and request mortgage rate quotes based on your FICO score and employment situation.;
Compare and contrast the mortgage rate information that you receive. You may find a great disparity between the quotes that you receive. ;
Select the lender that offers the lowest interest rate for your financial condition. If you are not happy with the rates quoted by these lenders go on to the next step.;
Talk to a local realtor and ask them if they have a lender that they work with.;
Contact the lender referred to you by the realtor. Make sure that you tell the lender that you were referred by the realtor as this may help to get you a better rate or lower closing costs. Ask the lender, who most likely will be a mortgage broker, what mortgage rates they can offer you based on your FICO score and your financial situation.
Research is key to finding the best rate.;
Don’t take the first rate quoted to you before you look into your other options.;
Ask for a referral from a local realtor to a mortgage broker or lender. This may help save you money on your closing costs and interest rates.;
Don’t be afraid to ask the lenders that you talk with what you can do to qualify for a lower mortgage rate.
When comparing mortgage packages make sure that you take into account closing costs, fees, and interest rates.;
Make sure the lender is a reputable company before signing any contracts.;
Don’t apply for a mortgage at a lot of different companies as this can lower your FICO score and increase the mortgage rate that you qualify for.
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