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This is an excerpt from "Credit is a Four Letter Word", which is copyrighted by the author. All rights are reserved. The entire book is available here. Although you can read the entire book by using the navigation at the bottom of this page, you might find it more convenient to have it available to print out, or read as a standard PDF. We've made it very affordable in that format, or you can continue reading (for free) here. I hope you enjoy it.
Ways to Find the Best Mortgage RateA mortgage is a type of loan where a piece of real estate is pledged as security to insure repayment of the debt. For most people applying for and receiving a mortgage for the purchase of the home that they will live in is one of the most important financial transactions they will ever make. Because of this, care should be taken to make sure you get the best deal possible. 10 ways to find the best mortgage rate: 1. Size does matter The first step in finding the best mortgage rate is knowing the mortgage size. Looking for the best mortgage rate is like shopping for that perfect little Gucci dress you dream of wearing on a dinner date of a lifetime. Analyze how much money you need to borrow. 2. Sounds INTEREST-ing! The next thing to consider is the mortgage's interest rate. You need to match this with your ability to make the monthly payments. 3. Terms So, you already know the size and percentage or interest of the mortgage rate you’re considering. The third step is to check on the terms. This is generally the length of time required to pay off the mortgage, if regular and fixed payments are made. Mortgages are typically 20 or 30 years in length, but they can vary. 4. Annual Percentage Rate or APR Calculating your annual percentage rate or APR is a must in getting the best mortgage rate. APR is the amount of interest charged on the loan annually. For example, if a 6% rate is quoted, that means that for every $1000 principle balance, you'll pay $60.00 per year. 5. Apples to apples comparison Now that you have the figures which represent the mortgage rate’s size, interest, term and APR – use these as efficient tools in solving the question – ‘which is the best mortgage rate for me?’ 6. The concept of points APR and the concept of points has a 100:1 ratio. If a loan is worth $100,000, then one point is equivalent to $1,000. In getting the best mortgage rate, it is important to be familiarized with the origination points and discount points of the different mortgage rates. |
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