Being a homeowner is exciting. You no longer have to stress over monthly rent payments, you can paint the walls any color you wish, and you can hang up things without asking for permission. Heck, build a fence or a pool in your backyard if you want! It’s your own personal space and it’s an amazing feeling. If you already own a home or you’re looking to purchase one in 2020, we want you to understand how to lock in the best mortgage rates. Here are a few tips we’ve prepared to find the best mortgage rates.
Choosing the Best Lender to Get the Best Mortgage Rates
This is probably the hardest step in the home buying process. You have to do enough research and talk with a variety of lenders before you can choose the best fit for yourself. Not only do you want to understand what their bank is offering, but you want to have that connection that makes them feel trustworthy. Each lender is competing for your business and wants to be the one you choose, but whether they offer the financial package you’re looking for will help determine if they’re worth your time.
A couple of tips for picking the best lender are as follows:
- Ask your local real estate agent for referrals. Realtors work with lenders all day every day, and they know if a lender is there to help people or just looking to make another dollar. They also know which lender works the best with specific loans.
- When it comes to loans, some lenders are better at managing a specific type of loan more than others. In your hunt, make sure you ask what type of loans they generally work with. If you’re getting a conventional loan but the lender of your choice primarily works on FHA or VA loans, then they may not provide you with the best options. Most lenders can manage all loan styles, but they may not be able to get you the best rate or overall package on a loan type they’re not constantly working with.
There are definitely more steps you can take when trying to choose the best lender, but the most important tip is to use your best judgment. If it feels like a lender isn’t offering you the best rate they can, or they’re not being honest, take a step back, and keep searching.
Routinely monitoring and working on your credit score can help drastically when it comes to finding the best mortgage rates. If your credit score is on the lower scale of things, then you’re less likely to get approved for a 300k loan. However, by working hard to build your credit and working with a lender that can give you tips on what you can do to improve your credit score, you’ll be able to increase your chances of getting a good rate.
Know the Market
Knowing when it’s a buyer’s market or a seller’s market is important. It can help determine whether it’s the right time to go house hunting. Fortunately, the market in 2020 has been a buyer’s market so far. This means that interest rates are low compared to being 12-17% like they were back in the early 2000s. It also means that you have to move quickly when you’re trying to pick out a house. Houses are selling quickly and even new construction homes are going off the market within days of being finished. Sometimes they’re going under contract before they’re finished.
Before you buy a house you have to get approval from the bank of your choice. This helps eliminate people that aren’t serious about looking for a home. Many real estate agents require a pre-approval before showing property as a safety precaution and also to make sure that a person can afford the house. When you make an offer, the seller will often want to have some form of proof that you can buy their home. This is a standard process in real estate and often doesn’t take long.
Many banks have an app you can download to your phone that allows you to easily input your information in return for a quick answer on being pre-approved for a loan. This helps build trust between buyers and sellers and enables you to start the house hunting and loan process.
Lock-In That Rate!
Once you’ve chosen your lender and started the pre-approval process, make sure you lock in your rate. Rates are constantly changing, and if you lock it in a 2.5% rate today but it rises to 3.5% tomorrow, you’ll still be able to purchase a home with the 2.5% rate. That’s the great thing about getting pre-approved. Even if you’re not ready to put an offer down on a house, it can benefit you having your rate already locked.
With the market booming and houses going up for sale each day, it’s time to start hunting. Get out there, find that perfect lender, take care of your credit score, go through the pre-approval process, and lock in that rate while you can. The housing market is only continuing to grow, and your dream home is out there waiting for you.
Find the Best Mortgage Rates
Need some help knowing who the best local lenders are? Contact the Nomadic Real Estate team. We specialize in helping people find the perfect home, getting the best mortgage rates, property management, leasing agreements and more. Our years of experience have put us on the front lines of real estate, helped us build an understanding of the market, and continues to help us bring our clients the best deals out there.
Let us share that experience with you and help you pick out the highest quality lender and that special property. We’ll take care of all the fine details like setting up the showing appointments, negotiating during the offer period, and we’ll represent you all the way through the closing process. We’ll help protect your interests each step of the way.