Best Mortgage Rates

A mortgage is a loan that could potentially impact your financial future for decades. It’s normally one of the largest loans that individuals take during their lifetime. If you’re thinking about getting a mortgage soon, it’s important to understand how mortgages work. Basic knowledge could help you find the best mortgage rates and terms available to you.

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How to Choose an Online Mortgage Lender

When choosing an online mortgage lender, there are a few things you might want to consider.

First, you need to make sure that you meet the minimum qualifications set out by the lender. Lenders set their standards based-on borrowers’ credit scores, incomes, and more. You need to understand these qualifications to know what lenders are willing to offer you. They are the factors that determine whether lenders will accept your application, and what interest rates you qualify for.

Mortgage repayment terms range from 15 to 30 years. If you get a mortgage with a shorter term, your regular repayments will be larger. Longer-term mortgages require smaller repayments, as your repayments are spread over a longer period.

Because less interest is charged over shorter periods of time, shorter-term mortgages normally end up costing less. Longer-term mortgages enable you to make smaller regular payments, but you will need to make those payments for longer.

Customer service is an important part of a good mortgage. Poor customer service is one of the most common complaints you will find on neutral platforms like the Better Business Bureau. You can use platforms like the BBB to gain insights into other customers’ experiences with the lender.

 

 

Traditional lender vs online mortgage lender

One of the main things that online mortgage lenders offer is convenience. There’s no need to speak with someone in person or step foot in a branch. You can submit your documentation electronically and complete your application online.

Additionally, many online lenders offer guidance throughout the process so you’re not left on your own, just as a traditional lender would. The only difference is it’s done via online communication and phone calls.

With traditional lenders, the process can also take longer due to the amount of paperwork involved. The online lending process is more streamlined and you just need to gather the paperwork and apply from home.

Best of all, with online lending, you can shop around and compare rates right from the comfort of your home. Online lenders allow you to submit some basic information about yourself to see what rates you qualify for, making it easy to compare lenders side-by-side and get the best rates on a mortgage. And once you’re ready to move forward with an offer, you can finish the process online.

Recommended Mortgage Loan Lenders & Markets

Top Mortgage Purchase Lenders

Quicken Loans – Best customer satisfaction and application process

Zillow – Easy to work with

AmeriSave Mortgage – Large variety of loan programs

Top Mortgage Refinance Lenders

Better Mortgage – Fastest application process

AmeriSave Mortgage – Straightforward, transparent quotes

Rocket Mortgage – 24/7 access to mortgage experts

Top Home Equity Loan Lenders

AmeriSave Mortgage – Large variety of loan programs

Figure – Best for good credit and higher borrowers

LendingTree – Good for any credit score

Mortgage Interest Rates Started to Rise

According to data from Freddie Mac, mortgage interest rates for mortgages of all terms have been steadily declining since 2018. But interest rates have started to rise in 2021, especially the common 30-year fixed-rate mortgage.

While mortgage rates are near an all-time low, there is no guarantee that rates won’t continue to rise.

How to Shop for Mortgage Rates

We recommend keeping several things in mind when comparing mortgage rates.

  •       Compare more lenders to find the best possible rates. You can find mortgages locally or from lenders in other states.
  •       Your credit score and other qualifications will affect the rates that are made available to you. Make sure you compare lenders according to what they offer borrowers with your credit score.
  •       Remember that, in most cases, when you apply for a mortgage, the lender will perform a hard pull on your credit report. That means your credit score may drop slightly if you make too many applications in a short time. Instead, pull your credit report (this is usually free) and ask lenders what rates they offer borrowers with your qualifications before you apply. This allows you to compare rates without sacrificing your credit score.

How to Qualify for Better Mortgage Rates?

It is possible to qualify for better mortgage rates by making some changes over time or by adjusting the terms of your mortgage. Here are a few ways you may be able to get better mortgage interest rates. 

Raise your Credit Score 

The most obvious way of getting access to better interest rates is to improve your credit score. Credit scores are a bit complicated, and we could go into much more detail about ways to improve yours. But if you can continuously make debt payments in full and on time over the course of months, your credit score should start rising.

Increase your down payment

Typical mortgages require a 20% down payment. But you can often get access to better rates or qualify for other mortgages by offering a larger down payment. Increasing your down payment also means you will take a smaller principal, so you usually end up saving money all around.

Lower your debt-to-income ratio.

Your debt-to-income ratio is a major factor in your credit score. It’s also something that lenders look at when you apply for a loan. By paying off debt and lowering your debt-to-income ratio before shopping for mortgages, you can normally find better rates.

FAQ on Best Mortgage Rates

What is a Mortgage Rate?

How are Mortgage rates set?

What is a good mortgage interest rate?

What is a good rate for a Home Equity Loan?

When should I lock in my Mortgage Rate?

How Does the Federal Reserve Affect Mortgage Rates?

How to pick a Mortgage Lender?

What type of Mortgage Should I get?

How Big a Mortgage Can I Afford?

What will I Need to Apply for a Mortgage?