Cheapest Fixed Rate Mortgage… Getting the Best Deal You Can

in Mortgages

The first question everyone asks when shopping for a mortgage is, “What is the cheapest fixed rate mortgage?”  After all, we all want the best bargain we can get, right?

You might think this is a pretty simple question, but the truth is that the question is actually a bit more complicated than that.  The real question is, “What is the cheapest fixed rate mortgage that I can get?”

Although mortgage interest rates are based on things like the rate the Federal Reserve charges banks to borrow money, there are a variety of other factors that also combine to determine the cheapest fixed rate mortgage rates that you can get.  Some of these factors are…

What is the length of the mortgage?

For example, is it a 15 year mortgage or a 30 year mortgage?  You’re likely to get the cheapest fixed rate mortgage deals if the term of the mortgage is only 15 years rather than 30 years.

What is the amount of the loan?

A very large loan may have a higher interest rate because of Freddie Mac and Fannie Mae rules.  “Jumbo mortgages” in most US states are loans for over $417,000 (as of 2010).  The average interest rates for jumbo mortgages are normally higher than for smaller mortgages.

What percentage of the home value is being borrowed?

Low down payments usually mean higher interest rates.  You are most likely to get the cheapest fixed rate mortgage possible if you can put at least 20 percent down as a down payment.

What is your credit score?

If you have a great credit score you are far more likely to qualify for the cheapest fixed rate mortgage deals than if you have a low credit score.

Is the mortgage for your primary residence?  A second home?  An investment in rental property?

You’re likely to get the cheapest fixed rate mortgage rates if the mortgage is for your primary residence.

With so many lenders competing to offer the cheapest fixed rate mortgage online, it’s far easier today to find the best deal possible.  Maximize your chances with the criteria above, and then start looking for the cheapest fixed rate mortgage deals around.

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