Get the Lowest Interest Rate on the Country Estate-Homes in Tracy, Ca
Monday, January 23, 2012
Get the lowest interest rate on this Country Estate.
Getting the Lowest Interest Rate on this Featured Home
THE lowest interest rates in decades sound enticing enough, but they are often out of borrowers’ reach.
Mortgage lenders adjust their rates based on perceptions of risk, so unless you can show you’re a low-risk borrower, you are unlikely to qualify for a rate that matches those seen in all the advertisements or headlines.
The rates quoted by Freddie Mac and others are averages drawn from a variety of financial institutions, and lenders use varied approaches to set them. These rates are not necessarily available to al borrowers. Consumers who want to try for the lowest rates available need to consider these basic factors.
CREDIT SCORE The ideal borrower has a FICO score of 740 or higher and that will put you in the best possible place for the best possible interest rate. Currently, borrowers with scores 760 to 850 (perfect score) could qualify for rates as low as 3.95%. That rate can change considerably depending on credit, loan amount, and other loan considerations.
POINTS The lowest rates usually are decreased by paying a fee called a point, or 1 percent of the loan amount. Rates can also be bought down, so ask before you sign on the dotted line and find out what it will take to get the best possible rate. A lot will depend on your financial situation and how long you plan to live in your home.
PROPERTY TYPES If you’re buying a duplex or a four-unit building, your rate will almost certainly be higher. Condominiums may also have a rate premium, especially if they are newer or your down payment is below 25 percent. Lenders charge more if you are not planning to live in the home. Commercial properties like apartment buildings have the highest rates, as they are usually considered riskier.
DOWN PAYMENT Putting as large a down payment as possible will also help get you the most favorable terms on your new home loan. If you can put 25% down payment you are most likely to get the most attractive rates out there. Generally, the more equity you have in the home the more favorable the terms.
LOAN LENGTH A lot depends on how long you plan to live in a home. If you’re likely to move in a few years, an adjustable-rate loan with a low interest rate fixed for, say, three to five years, and adjusted afterward, might work best. Also, rates on 15-year fixed-rate loans are lower than those on the 30-year — 0.77 percentage points, on average, last year, according to Freddie Mac. Some borrowers may not need to have a long term loan because they do not plan to be in the area for 30 years. And, borrowers may also be able to reduce their mortgage rate when they enter into a “lock-in” agreement with a lender. Lenders typically offer a lower rate for a shorter lock period because their risk to rising costs is more limited.
Lenders typically agree not to change an offered interest rate for 60 days, but borrowers confident of a quick closing may be willing to accept a 45-day rate guarantee, or even a 30-day lock, in exchange for a small discount, because the transaction’s speed helps the lender reduce its risk.
For more information about this property or how to get the lowest interest rate for you, contact Joe Montoya at 209-740-1447 or by email at joemontoya@gotracy.com
