How Do I Get the Lowest Mortgage Rate?

Q: I recently got a mortgage loan quote, it’s higher than the national mortgage rate I saw posted everywhere. What gives? How do I get the lowest mortgage rate? Jeff, Hillsdale, NJ

A: Good question, Jeff.  When you see a very low loan offers or hear about the latest movement in interest rates in the media, take it with a grain of salt. Lenders price your loan with adjustments based on certain risk factors including:

  1. Your middle credit score

  2. Your loan size (how much money you’re borrowing)

  3. The loan product you qualify for

  4. The purpose of your loan (i.e. whether you are buying or refinancing)

  5. Whether you plan to live in the property or not

So, the the riskier your mortgage loan is considered to be, the higher your interest rate may be and the more it will differ from the national interest rate you see or hear about in the news.

Also, keep in mind that all mortgage companies, mortgage brokers and financial companies that offer mortgage loans have a profit motive, so getting the lowest possible interest rate is impossible because you’ll never be able to borrow money at the lender’s cost of funds.

The good news is that generally, offers from mortgage companies tend to be priced in the same range on any given day, because lenders compete with each other, so shop around and always remember to read the fine print.

Thanks for your question, Jeff, good luck.

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