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Summary: As a home buyer and mortgage shopper, there are some things you can do to ensure that you are getting the lowest possible interest rate on your home loan. This article will list three tips for getting the best mortgage rates in Washington State.
The lower the interest rate on your mortgage, the better. This will help reduce the overall cost of your mortgage, helping you save tens of thousands of dollars, and potentially more. Her are some ways to get the best rate on your Washington home loan.
Mortgage pricing is a highly individualized process. There are many different variables that can affect the rate you receive on a home loan in Washington. These include (but are not limited to) a person’s credit score, the type of home loan being used, the size of the down payments, and other factors.
Paying points when you take out a home loan is one way to secure a lower mortgage rate. Under the right circumstances, this financing strategy could save the homeowner a significant amount of money over time. For that reason, it is best suited for a long-term stay of at least a few years.
A “point,” in this context, equals 1% of the principal amount being borrowed. In order to get the best possible mortgage rate, some Washington home buyers choose to pay points at closing to reduce their interest rate. It’s essentially a form of prepaid interest, as well as a trade-off. You are paying more money up front in exchange for a lower rate that could save you money over the long-term.
There is a close relationship between credit scores and mortgage rates. Generally speaking, borrowers with higher scores tend to qualify for better rates, with all other things being equal.
Consumers actually have three primary credit scores, because there are three reporting agencies that maintain this kind of information. They are TransUnion, Equifax and Experian.
Banks and lenders use consumer credit scores as a risk-analysis tool. A higher number indicates a positive borrowing history, which is viewed as a lower risk to the lender. As a result, home buyers and homeowners in Washington with excellent credit scores are often able to qualify for the best mortgage rates.
But again, this is just one factor of many. Mortgage pricing takes several different factors into account. Credit scores are an important factor. But they are certainly not the only one. The type of home loan being used also plays a role here.
In a previous tutorial, we covered some of the different types of mortgage loans available to borrowers in Washington State. Choosing the right kind of loan can also help you qualify for the best mortgage rate possible, given your credit situation and refinancing goals.
For example, adjustable (ARM) loans tend to start off with lower interest rates than their longer-term fixed-rate counterparts – at least initially. That’s why some homeowners prefer to start off with an ARM loan, with plans to either sell or refinance the home later on.
Will you need mortgage financing to buy a home? At Sammamish Mortgage, we offer a wide variety of mortgage programs and tools with flexible qualification criteria. We serve the entire state, as well as the broader Pacific Northwest region that includes Oregon, Colorado, Washington, and Idaho. Please contact us today with any financing-related questions you have.
There several factors that affect your mortgage interest rate, including your credit score and choice of property.
When it comes to buying a home, there’s a lot of budgeting involved. As a buyer, you want to do your best to pay the lowest price possible for your home so you don’t end up paying more than necessary.