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Current Mortgage Rates Remain Low So Use These Four Tips to Get a Great Deal

Posted by  on Oct 08, 2010
 

Current Mortgage Rates

Freddie Mac says that the average 30-year, fixed-rate mortgage (FRM) rate was 5.07% during week ending April 22, 2010. The Mortgage Banks Association's most recent figure (for week ending April 16, 2010) for that sort of mortgage loan was 5.04%.

It's true that Freddie Mac says that the same mortgage this time last year would have averaged 4.8%, but the fact remains that the current figures are among the lowest mortgage rates in history.

Best Mortgage Rates Can't Last for Ever

However, as Michael Fratantoni, who is the Mortgage Bankers Association's vice president of research and economics, recently told the New York Times, ''People may get lucky and may catch a day or a week when rates are relatively low. But we do think we're on an upward trend from here.''

So Mr. Fratantoni seems to believe--as do most experts--that the days of the very best mortgage rates are over, but that there are still amazing bargains to be had. However, those bargains are unlikely to be around for very long, as current mortgage rates look set to rise.

Best Mortgage Deals and How to Get 'em--Four Tips

Tip One--Compare Mortgage Rates

Don't get pressured into signing up for the first mortgage quote you're offered. A recent New York Times feature suggested getting quotes from at least six sources, including banks, mortgage brokers, and credit unions.

Tip Two--Save for a Down Payment

Saving is never easy, but in this economy it's a real challenge. However, if you can put down 20% of the purchase price of your dream home, you'll save a bundle on mortgage insurance.

Tip Three--Actively Manage Your Credit Score

As a rule, the better your credit score, the cheaper your mortgage quotes will be. If yours is up above 720 or so when you apply, you stand a good chance of getting a truly excellent deal. Don't leave things to chance. Starting six months before you expect to apply, closely monitor your score, and be sure to:

  • Make payments on time.
  • Not apply for other loans or cards.
  • Keep your credit utilization (the proportion of your available credit that you actually use) in check.

Tip Four--Don't Overextend Yourself

Don't rely on your mortgage brokers to advise you about how big a home loan you can afford. As the National Association of Realtors says:

"It's up to you to take stock of your income and expenses, both current and projected, to determine what you can comfortably manage each month. Along with your mortgage payment, don't forget related insurance, taxes, homeowner association dues and any other costs rolled into the mortgage payment."

Compare Mortgage Rates Now

Whether you're thinking of purchasing or refinancing, you can begin the whole process now, by getting mortgage quotes here.

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