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Scoring a good mortgage rate is a big piece of the homebuying puzzle.
But recently, mortgage rates have been going through a sort of tug-of-war in the market. Growing concerns over the Omicron variant of COVID-19 and new waves of COVID cases threatening economic progress are putting downward pressure on mortgage interest rates, Zillow economist Nicole Bachaud recently told us.
Adding to the mix, the November 2021 consumer price index reported the largest inflation surge in 39 years. The Federal Reserve’s stance is to raise interest rates if inflation continues this upward course.
For people entering the housing market or looking to refinance, financial experts agree that scoring the best mortgage rate can save you thousands of dollars. A mortgage interest rate is how much you pay your lender for borrowing your home loan and even a slight difference matters.
You can’t control the economic factors influencing rates. But here are 11 steps you can take now to get the best rate for you—no matter what’s happening in the market.
The Financial Difference Between Two Mortgage Rates
Never settle on the first lender you get a quote from. According to research from the Consumer Financial Protection Bureau, interest rates between mortgage lenders can vary by 0.5% or more for similarly qualified borrowers. To secure the best rate, fees, and terms for your situation, most financial experts recommend comparing at least two to three different quotes.
Here is the difference in dollars between two different mortgage rates on a new purchase with a $300,000 home loan:
|Loan Amount||30-Year Fixed Interest Rate||Monthly Mortgage Payment: Principal & Interest||Total Interest Paid|
In this example, there is a 0.75% difference between Loan A and Loan B. Loan B costs $120 less per month and a total of $43,383 less in interest over the loan’s life.
Here’s How to Get the Best Mortgage Rate Right Now
No matter if rates are at record highs or lows, here are 11 timeless steps borrowers …….