Best Discount Mortgage

November 20th, 2009 Comments(0)

What is the best discount mortgage? Well, that depends entirely upon what kind of rate that you can get with your credit score and what the prime rate is. A discount is anytime you get a lower interest rate than you would have gotten normally. There are many different discount mortgage factors. Credit score is a big one. Having a good credit score will ensure that you get the prime mortgage rate and sometimes a bit lower if you negotiate. There are also discounts for longer terms or by taking certain kinds of mortgages if they happen to be offering a deal for a certain type of mortgage.

If you look at mortgage loans you will find that they are pretty much consistent all across the board. The rates will be almost exactly the same at each company that you go to, so determining which will offer you a discount for whatever reason is vital. Of course, getting a discount shouldn’t discount shouldn’t take precedence over other factors such as early payment penalties or other terms that are uncomfortable. However, finding cheap mortgage loans can be as simple and easy as asking for them.

To find discount mortgage rates first determine if you qualify for the prime rates that are offered to those with good credit. Most mortgage companies start with a credit score of about 650 to even approve a mortgage and then 750 is about where they really start trying to earn your business. If you know what your credit score is, that will help you determine where to start. If your credit score is a little low than you may want to wait a few months before you begin applying for your mortgage to fix your credit. Even a little higher score may mean a much lower interest rate.

Another thing that can affect the interest rate that you get is other credit risk factors that aren’t based upon your past credit history. For instance, if you make $3000 a month and you have $1500 a month going out in credit card payments and other loans then you will be a higher risk than someone who has more available income. If you can, try to eliminate as much of your debt as possible before you go in and apply for a mortgage. This is commonly referred to as your debt to income ratio and having one at around 35% will get you the best discount rate for mortgages.

Down payment is another thing that will affect your interest rate, again because you represent a much less risk to lenders if you put a lot of money into your home. A down payment of 20 or 25 percent can often get you a discount mortgage interest rate especially if you ask for one. When buying a home, it’s always a good idea to have as large as down payment as possible, not only because you will get a better interest rate and have a much better of being approved, but also because you will save a lot of money in interest and already have some equity in your home.

How To Get Discount Mortgage Rates

November 20th, 2009 Comments(0)

If you are wondering how to get discount mortgage rates then the answer is actually relatively simple. You shop around and you ask for them. You will be surprised how many times you can get a discount on your mortgage rate simply by saying that you aren’t happy with the rate and that you are going to continue shopping. Companies want your business and they are often willing to give you a deal to get it. They may do so under the guise of special discounts or programs but generally they will offer something.

The first thing to keep in mind is that to find the perfect mortgage loans you may have to shop around a bit. Start with local companies in your area, especially those that you already have an established relationship with to see if they will offer you some sort of discount mortgage rate. Of course, when it comes to mortgage rates discount may not be the term that is used, but they may say that your credit history allows you to quality for their prime rate or some other terminology after you ask for a discount.

You can find discount mortgage rates at usually about a half a percentage point below the normal rate. For instance, a fixed rate discount may be around .6 percent. This percentage will increase the longer that you make the term of the loan because the company will be able to make more on the interest the longer that you are paying for the loan. So, while you may not be able to get a discount for a ten or fifteen year mortgage extending the loan out to thirty years may get you the discount rate that you want. Of course, this also means that you’ll be paying more money as well, so you’ll have to decide if its worth it.

If you had planned on getting a thirty year mortgage anyway, but you go into the negotiations with a ten or fifteen year mortgage on the table, then you will have a lot more room to negotiate a discount than if you simply went in, laid your cards on the table, and applied for a thirty year fixed rate mortgage. Also, you can play around with other options such as fixed or variable rates and get discounts that way. Make sure that you educate yourself about mortgages before you go into the finance company as knowing what you are doing can save you a lot of money.

Even a half a percentage point is quite a discount when it comes to mortgages. If you look at a $400,000 mortgage with no down payment, a half a percent of interest saved is $2000 a year or $60,000 on a 30 year mortgage. That is why it is so important to try to negotiate for a discount if you can because even a small one will save you tens of thousands of dollars in interest over time. If you don’t ask then you won’t receive, or some variation of the saying.

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