If you want to qualify for the best fixed rate mortgage, the first thing you are going to have to day is understand exactly how the banks and lenders calculate the interest rates that they are going to offer you and anyone else they are going to lend money to. At one point in time most of us went to our local bank and applied for our mortgages. The banker knew you and based the interest rate on your mortgage on this.
However, you are not likely to see this anymore as even your local bank is going to use a completely different set of rules and can no longer likely to use your friendship as a basis for your loan, let alone your interest rates. Instead they are going to take a close look at what other lenders are charging borrowers that match your circumstance on the day you apply for your loan. Mortgage rates today tend to vary on a daily basis, so don't be surprised if you receive a range of interest rate quotes.
Given this new method of determining interest rates, you are going to have to meet certain established criteria if you want to get the best fixed rate mortgage from the bank or lending institution you plan to deal with. The most important of these is your FICO rating, better known as your credit score. For the first time home buyer and seasoned buyer as well, a high FICO score is the most important factor. This is the first thing today's lenders look at when they consider you for a loan and start to calculate your interest rate.
The lower your credit score is, the higher the interest rate you are going to have to pay is likely to be. If you have any negative comments on your credit report, you need to take steps to have them removed or correct the problem that caused them to be there in the first place. Another step you can take is to make sure that you have a sizeable down payment. The more you money you have, the lower your mortgage payment is likely to be.
After taking all of this along with things like how long you have been on your job and your salary into consideration, the lender will come with his best interest rate offer. If it is higher than you had anticipated, ask them why and then take the necessary steps to correct the reasons given. You can always talk to several lenders and see who is going to give you the best interest rate on your home loan so that you can finally live the American dream and be a homeowner.
Author Resource:
Oliver Silverstones makes it easy for the first time buyer to find all the state and local first time buyer programs. He keeps a daily update of the lowest mortgage rates today , as well as providing great advice to avoid most first home buyer headaches.
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