The biggest reason a borrower chooses a lender is usually the mortgage rate. With everything else considered the biggest factor in picking a mortgage lender is the mortgage rates they give you. The lower the rate is the more you will save in the long run. Here are some tips I have included to help you get a refinance at the best mortgage rate possible.

Choose the Correct Mortgage
The right mortgage for your particular needs is often the best route to the lowest rates possible. Getting the wrong mortgage can also save you money but maybe not so much in the long run, or worse can end up costing you a lot more. If you choose an incorrect loan type for your personal financial situation it is likely you will end up taking another mortgage out to make up for the mistakes you made.

Compare Different Types of Mortgage Rates.
You must be sure to compare potential lenders offers to each other. Take into account not just the interest rate but also the terms conditions and length of the loan. Make sure the monthly payments are able to be paid in full every month before signing anything.

ARM (Adjustable Rate Mortgage) Loans
Commonly referred to as an ARM, this type of loan has interest rates that vary. It can be a good choice if you want to take full advantage of the really low interest rates available now but are sure that when the rates rise you can still make the payment. A lot of different types of ARM loans are available including but not limited too graduated payment mortgage, two-step mortgages, amortizing loans negatively, and a buy down mortgage.

Fixed Rate Mortgages
A fixed rate mortgage gives you assurance as to what your monthly mortgage payment will be every single month. The interest rates are fixed and therefore no matter what your or the markets financial situation is your payments, terms, and rates are the same. However, usually a fixed rate mortgage is very strict and does not allow much wiggle room should you come into problems in the future. Often changing a particular term or condition of a fixed rate mortgage will require a creditors approval first then maybe you will get what you wish for. Generally a fixed term mortgage is long term over the course of 30 years. Sometimes they have a balloon payment at the end but with these low rates available you should be able to save enough to make that balloon payment at the end.

Conventional Loan Options
The only reason these are different the mortgages is due to their source. A conventional loan is usually offered by big well established companies and have very strict guidelines they follow as set by the Federal National Mortgage Association. Requirements for conventional loan types are usually what you would face getting a bank loan. You need to provide proof of income, proof of down payment, credit history, and proof of assets among other things. To help ensure you get the lowest rate make sure you compare different lenders of your situation. Do not ever be afraid to ask questions.

An Interest Only Loan
An interest only loan sometimes has a fixed rate or a variable rate but are especially unique due to letting borrowers pay only interest payments for a determined length of time. Usually when the time is up the borrower will have an option to either pay off the rest of the loan, refinance the loan, or make monthly payments which include some interest.

Always make sure to do good research on any and all potential mortgage lenders. Show patience and do some research your self on commonly used terms that you will hear when facing a refinance. It pays to be an educated borrower. Often, the stricter a mortgage lender is the better terms, conditions , or rates you can get. However this is not always true.

-M Petrone

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