To refinance your existing mortgage seems to be an inalienable right. Do not listen to the “experts” that will tell you once the prevailing mortgage rate falls .50 – 1% below the rate on your current mortgage you should refinance. Running off to refinance your mortgage when headlines announce mortgage rates are falling is not the best of ideas.
The residential home mortgage business is competitive. There are several types of lenders that can offer loans. They range from your local credit unions, to the online virtual bank, the large national bank and the local (and sometime virtual) mortgage broker. Take a minute to understand the role of a mortgage broker. Compare a mortgage broker with a credit union. The credit union that offers rates the credit union sets, a mortgage broker will arrange or broker a transaction between you and a lender. Brokers shop many different lenders to find the best one for you and will offer a range of product selections. They are not obligated to get the best deal for the borrowers. Always contact several banks and brokers to compare rates.
Committing to become a homeowner takes courage. It commits you to monthly payments, annual tax bill and all the unknown maintenance issues that may crop up. It is a fact that the larger down payment that can be put down on a property purchase the better rate (up to a point) a borrower can get. First time home buyers often do not have a large (20%) down payment to use toward the purchase of a house. Searching for rates on the internet or calling local lenders will result in a general idea of what rates are available. Luckily there are state and federal loan programs available for first time home buyers. These programs often make mortgages with low down payments and some provide grants to provide funds for down payments. Before deciding on a specific rate, first time home buyers should look into specific loan programs that allow for low down payments or are designed for first time home buyers. Once you understand the loan programs available then shop the lenders that offer the programs and compare rates and fees. Not all low down payment loan programs are offered by all lenders. Be prepared for the fact that the smaller the down payment the higher the interest rate.