Since when have mortgage rates been this low? They go down a little one day. They go back up the next day. Asking yourself if now is a good time to buy a house can be hard to understand and even annoying.
That’s one reason why it’s not a good idea to try to time the market. You have no say over how mortgage rates change. But you don’t have no power. There are things you can do, even though the economy is tough right now.
You can decide what kind of loan you want and how long you want to borrow it for. That way, you can get the best rate on the market right now.
Your Credit Score
The mortgage rate you can get will depend a lot on your credit score. A small change in your score can have a big effect on how much you pay each month. As Bankrate puts it:
When you apply for a mortgage, your credit score is one of the most important things lenders look at. This is true not only for getting the loan, but also for the terms: generally, the higher your score, the better the terms and lower interest rates you’ll get.
If you want to get a home loan, it’s important to keep your credit score high. Talk to a loan officer you trust if you don’t know what your score is or how to raise it.
Your Loan Type
Getting a loan is also possible, but each type has its own requirements for people who want to use it. This is what the Consumer Financial Protection Bureau (CFPB) says:
“Conventional, FHA, USDA, and VA loans are just a few of the main types of mortgage loans.” Lenders choose which products to offer, and different types of loans have different requirements for who can get them. Rates can be very different based on the type of loan you choose. You may not fully understand all of your options until you talk to more than one lender.
A mortgage professional should always help you figure out which loan is best for you and your finances.
Your Loan Term
There are various loan types and loan terms. The way Freddie Mac puts it is this:
If you want to get the best home loan, you should think about the loan term. This is the amount of time you have to pay back the loan before you own the home outright. Your interest rate, monthly payment, and total interest you pay over the life of the loan will all depend on how long you borrow the money.
Most lenders offer conventional loans for 15, 20, or 30 years. Talk to your loan officer about what will work best for you.
Bottom Line
Things like the economy and mortgage rates are out of your control, but there are things you can do to get the best rate.
Make plans to talk to a real estate agent and a lender about what you can do now to be ready to buy a home when the time comes.