People are always looking for the best mortgage loan rate that they could get their hands on. While it may be tempting to take on the word of the lenders for the low interest rates on some of their mortgage loan products, most of these banks calculate the rate on a case-to-case basis. They usually determine the interest rate for each individual based on a set of criteria.
Even local banks nowadays use at the prevailing rate in the market and charge them to the borrower. If you go to a local bank and apply for a 30-year fixed rate mortgage loan, the local bank will still look at the base rate for this loan.
When you go to a lender for mortgage loans, you bring with you your special situation-your employment, your credit rating, your present debt and the things that your present income and savings situation. The banks will then look at your circumstances and adjust the base rate to suit your needs without compromising their profit margin. Low rates are usually given to those with good credit rating.
It is therefore important for you to make your payments on time and take good care of your credit rating and your credit history. That way, you will not find it difficult to apply for refinance mortgage loans in the future.
Blots and blemishes on your credit record will make it more difficult for you to borrow money. You may even be charged with higher rate because of this. That is because you represent a higher risk to the bank’s business.
Your present employment, salary level and monthly expenditures are also taken into account. Banks and mortgage lenders want the assurance that you can pay your amortization.
After the process has been followed, the mortgage lenders will then present a rate for your mortgage loan. Most of the time, this is higher than the published or advertised rates. You may react violently in this case. But most of the time, lenders are not willing to lower their rates. What you need to do then is to consult another mortgage lender or a bank, hoping to get the best mortgage loan rate.
After doing some sort of window shopping, you can compare different rates and make a decision based on the best mortgage rate that you can find. The best way to go through this is to make a large down payment, have a good credit score and aim for a good income level.