The whole process of mortgage and its rate seems quite puzzling to every first-time home buyer. Before picking out the mortgage, you should look for the mortgage rate. The lower the rate is, the better the borrower can fly. Now, do you know which factors affect the rate? If you can keep the aspects in mind, you can snatch the best deal away.
The best mortgage rates in Houston are not hard to find only if you are mindful of certain factors. Does a borrower have a decent financial status or not? This fact is very much linked to the loan interest rate. From the last year, the mortgage rate is facing downward. However, the low rate does not always mean that you can get a handsome deal, either. Most of the customers are intimidated by the loan process and they tend to go with what seems easier. This may be a huge problem in the long haul. Read the article to find out which factors affect the rate and make the final decision accordingly.
- The Loan Amount Becomes a Factor
It depends on the homeowner how small or big the interest rate should be. The loan amount you are willing to borrow comprises of the closing costs (excluding down payment) and home price. The mortgage insurance and closing costs are often calculated in the mortgage amount but the loan is considered before that. As the lenders always recommend choosing the loan before the house shopping, you should also have a vague idea about the home price.
- Maintain a Strong Record of Employment
Before seeking the best mortgage rate, you should pay heed to the employment status. The lenders prefer homebuyers with steady employment and earnings. If you manage to provide proof of stable income through W-2s and pay stubs. The person with shaky record suffers a lot for availing the lowest interest rate.
- Market Condition Leaves an Impact
In Houston, the housing market leaves a huge impact on the mortgage rate. If there comes a time when only a few houses are built, there will be a decline in demand. This crisis leads to severe downfall in the interest rate. At present, there is a market trend that calls for a huge number of customers renting out instead of buying a home. The ups and downs of the market affect the interest rate. Of course, the demand is also subject to change and the mortgage rates are fixed accordingly.
- Large Down Payment Holds the Key
The large down payment leads to a low mortgage rate. For this very reason, you must have low risk in your profile. You can put down as low as 3.5 percent but you should try to put down at least 20 percent. In many cases, your incapacity of putting 20% down may lead to private mortgage insurance. If you are unable to pay the loan or there is a risk of the loan going on default, the private mortgage insurance acts as a cushion.
After going through the aspects, you should remember that the FHA loans have a low interest rate. Seek help from the professional lenders in Houston today!
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.