How Do I Get the Best Fixed Mortgage Rates?
Learn What Is Required to Lock in the Lowest Fixed Mortgage Rate
Get the Approved for Best Mortgage Rates Online
Compare mortgage lenders that have earned reputations for delivering great service and competitive fixed mortgage rates as well.
Nationwide recommends fixed mortgage rates when you are seeking long term financing or if you are unsure about how long you make keep your home.
- Current FHA Rates – Compare fixed interest rates from an Approved FHA lender for purchase or refinance.
- 30-Year Refinance Rates – lock into fixed rate for 30-years.
- 15-Year Refinance Rates – Get approved for the lowest fifteen year mortgages ever recorded.
- VA Refinance Rates – These loans are available to 100% for rate and term refinances and cash out loans up to 90% loan to value.
- FHA Refinance Rates – These government mortgages are available to 96.5% for streamline and 85% loan to value when borrowers want to consolidate debt or get cash out.
8 Ways to Get the Best Fixed Mortgage Rates?
When it comes to securing a mortgage, one of the most crucial decisions you’ll make is choosing the type of interest rate that best suits your financial situation.
A fixed mortgage rate, which remains constant throughout the life of the loan, can provide stability and predictability in your monthly payments.
However, qualifying for the best fixed mortgage rate requires careful planning, research, and timing.
Here’s how you can maximize your chances of locking in the most favorable mortgage rate for FHA, VA, USDA, Fannie Mae, Freddie Mac and private home loans.
1. Know the Market
Mortgage rates are influenced by a variety of factors, including the overall economy, inflation, the Federal Reserve’s monetary policy, and housing market conditions. Before you start shopping for a mortgage, it’s essential to understand the current market trends. This knowledge will help you determine whether it’s a good time to lock in a rate or if you should wait for potential rate drops.
You can keep an eye on mortgage rate trends by following financial news, consulting with a financial advisor, or using online tools that track average mortgage rates over time.
2. Improve Your Credit Score
Your credit score is one of the most significant factors that lenders consider when determining your mortgage rate. Borrowers with higher credit scores are generally offered lower interest rates because they are seen as less risky.
To improve your credit score:
- Pay Down Debt: Lowering your credit card balances can boost your credit score quickly.
- Make Payments on Time: Consistently paying your bills on time is crucial. Even one missed payment can negatively impact your score.
- Avoid Opening New Credit Accounts: Each new account results in a hard inquiry on your credit report, which can lower your score temporarily.
By improving your credit score before applying for a mortgage, you can position yourself to receive a better interest rate.
3. Shop Around for the Best Lenders and Brokers
Not all lenders offer the same mortgage rates, so it’s essential to shop around and compare offers from multiple lenders. Consider checking with:
- Traditional Banks: Many large banks offer competitive mortgage rates and have the resources to provide personalized advice.
- Credit Unions: Credit unions often offer lower rates than traditional banks because they are not-for-profit institutions.
- Online Lenders: Online mortgage lenders can sometimes offer lower rates due to lower overhead costs.
- Mortgage Brokers: Brokers work with multiple lenders and can help you find the best rate available based on your financial profile.
When comparing lenders, be sure to consider not only the interest rate but also the annual percentage rate (APR), which includes additional costs like origination fees and closing costs.
4. Consider the Loan Term
The length of your mortgage term also affects the interest rate. Generally, shorter-term mortgages, such as 15-year fixed-rate mortgages, offer lower rates than longer-term mortgages like 30-year fixed-rate loans. While the monthly payments on a shorter-term loan will be higher, you’ll pay less in interest over the life of the loan, and the lower rate can be more favorable.
If you can afford the higher monthly payments, opting for a shorter loan term could be a smart way to secure a lower interest rate and save money in the long run.
5. Lock in Your Rate
Mortgage rates can fluctuate daily, so once you’ve found a rate you’re comfortable with, consider locking it in. A rate lock guarantees that the rate you’ve been quoted will remain the same for a specified period, typically 30 to 60 days, even if rates rise before you close on your mortgage.
Keep in mind that some lenders charge a fee for a rate lock, especially if you need to extend the lock period. However, this fee can be worth it to protect yourself from potential rate increases.
6. Make a Larger Down Payment
A larger down payment can lower your mortgage rate because it reduces the lender’s risk. If you can afford to put down 20% or more, you may be able to secure a lower interest rate and avoid paying private mortgage insurance (PMI).
PMI is an additional monthly cost required by lenders when your down payment is less than 20% of the home’s purchase price. Avoiding PMI not only lowers your overall loan cost but also makes you a more attractive borrower, which can lead to a better mortgage rate.
7. Negotiate with Your Mortgage Lender or Broker
Don’t be afraid to negotiate with your lender. If you have a strong credit score, a solid down payment, and a good understanding of current market rates, you may be able to negotiate a lower rate or reduced closing costs.
You can also use offers from other lenders as leverage. If one lender offers a better rate, share this information with other lenders to see if they’re willing to match or beat the offer.
8. Consider Paying Points
Mortgage points, also known as discount points, are loan origination fees paid directly to the lender at closing in exchange for a reduced interest rate. One point typically costs 1% of the loan amount and can lower your rate by about 0.25%.
Paying points can be beneficial if you plan to stay in your home for a long time because the lower interest rate will save you more money over the life of the loan. However, it’s important to calculate the break-even point to determine whether the upfront cost is worth the long-term savings.
Summary of Getting the Best Mortgage Rates Online
Securing the best fixed mortgage rate requires a combination of good financial habits, market awareness, and strategic decision-making. By improving your credit score, shopping around for lenders, considering different loan terms, and taking advantage of rate locks and points, you can increase your chances of obtaining a favorable rate that fits your financial situation. Remember that a lower rate can save you thousands of dollars over the life of your mortgage, making the effort well worth it.