Real Estate Tips: How Can I Get the Best Mortgage Loan Rate and Terms?

Getting a low mortgage rate is not only possible but can save a home buyer hundreds if not thousands of dollars. For example, missing out on a 1 % interest reduction on a $200,000 home is $2000.00/year. That's a big high definition television, or an IRA contribution down the drain. Getting that 1% reduction is possible and is worth the effort. After reading this article, saving an extra 1% on the next mortgage or mortgage refinance might seem a little more realistic and a little less daunting. The following tips may serve one well in the quest for the elusive 1-2%.

•Don't Use a Broker: As bad as it sounds, mortgage brokers often serve as unnecessary middle persons between a bank and loan seeker. They simply aren't always necessary and neither are the extra fees and higher interest rates they find.

•Boost Credit Rating Beforehand: If time is on your side, wait 6 months to a year before buying a house to make that credit rating as good as it can be. Every rise in credit rating could mean a decline in interest rates. To boost credit ratings takes a little work; cleaning up credit card debt, and keeping up on utility bills are a good place to start.

•Save money for Down-Payment: A 20% down payment or better means mortgage insurance is not required and may increase credibility and improved financing prospects with a bank. Credibility and collateral mean better loan security for a bank which can translate into a lower interest rate.

•Shop Around: There are many mortgage companies and tons of lenders itching to win a new loan contract. When it comes to loans, it is always a buyers market. Don't be intimidated by the process; yes it can be complicated, but so can shopping for shoes or finding the perfect oak finish.

•Research: Research is not always fun, but in the case of mortgages it is often good measure. Due to the complex nature of mortgage financing and lots of small print, it can be very helpful to take time and research the different loan companies, their policies, types of loans and lending requirements.

•Consider Seller Financing: Sometimes sellers finance homes at favorable terms that not only may eliminate hefty settlement fees, but may also afford the home buyer a better interest rate. Alternative loan options are often worth a thought if it means lower interest.

Each of the above steps is only an introduction to the amount of time and effort needed to accomplish the goals of each point. These goals are doable and have been done by others. They do require some dedication and action, but achieving a lower interest rate is a part of consumer financial empowerment. Financial empowerment is a good thing because it helps build financial freedom and can allow one to proceed confidently through the mortgage process. As is often the case, loan mortgage payments can significantly reduce monthly contributions after hazard insurance, property tax, mortgage insurance and typical front end mortgage interest amortization deductions. This may leave only a fraction of the original mortgage payment left over to pay for the actual principal house loan. Paying off this principal is in turn, facilitated by attaining an improved interest rate.