When many individuals agree that home-buying is a daunting process; others love to disagree by calling it an adventure. No matter which side you are going to end up, you must be worried about the mortgage interest rates.
While applying for the home loan, the borrowers always wonder whether they can lower the rate on notch down. It is only if you can remember a few tips by heart. Take a look at the following tips and find out the best mortgage rates in Houston.
- Don’t Ignore the First-Time Homebuyer Programs
Before finalizing the mortgage, you should check whether you are eligible for the special programs that allow low credit scores. Moreover, the mortgages for the low down payment and low credit scores are widely popular among first-time homebuyers. In Houston, you can apply for down payment assistance which is exclusively granted to the first-timers.
- Loan Modifications during Hard Times
When you are going forward with a low down payment mortgage, you will have to pay a hefty amount for private mortgage insurance. Many individuals struggle to manage the monthly mortgage payments and they can submit an application for lowering the interest down. After reviewing your present financial situation, the lender may approve or turn down your application. It is important to discuss with your lender that you are having trouble paying down the mortgage. You need to submit authentic documents of pay stubs and tax returns that reflect your assets and income.
- Choose between Adjustable and Fixed Interest Rates
Your home loan can be either adjustable rates or fixed interest rates. The fixed-rate loans ensure a steady interest rate that you can pay over the loan term and a section of the mortgage payment is added to the principal. The interest rate does not change over the life of your loan; however, other costs like property taxes may go up and down. On the other hand, the adjustable-rate mortgage offers a changeable interest. If you are rooting for an adjustable-rate mortgage, you must prepare for the initial period of seven, ten, three, or five years. At this time, the interest rate remains stable but the rate will change from one period to another. This type of mortgages also has low rates at the beginning; however, the ARM rate can increase when the introductory period is over.
- Keep the Closing Costs in Mind
The lenders charge the closing costs as the costs do not affect the interest rate. On the contrary, closing costs affect your wallet and the amount is only 3 percent of the house. It is paid when you are finalizing, purchasing, or closing the house. Involving different costs including processing charges, appraisal fees, and underwriting fees, the closing costs can consider many things.
In the end, it is vital to find a lender who can ensure how rates can affect your monthly budget. The lender must show interest in guiding you in every possible way so that you can finally buy the house of your dream without a hassle.
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.