I Want To Get The Lowest Mortgage Rate, Will I Need To Pay Points?
By Kevin LandisI want to get the lowest mortgage rate; will I need to pay points? Find out here if you will need to pay extra fees to get the lowest rates!
With mortgage rates at all time lows, many people are looking to buy a new home or refinance a mortgage. Due to tightened lending restrictions, many lenders are not willing to give the lowest interest rates to all borrowers. There are many situations where if someone wants to get the lowest mortgage rate, they will need to pay points.
Credit Score
The first determinant lenders take into consideration when offering interest rates is the borrower’s credit score. More often than not, the interest rate advertised on a lender’s website is reserved for those people with credit scores above 740. If the borrower has a credit score below 740, they will often need to pay points at closing to obtain the lowest mortgage interest rate.
Another situation where someone wanting the lowest mortgage rate will have to pay points is if they do not put down enough of a down payment. The best rates advertised by lenders are normally reserved for those people who can put down 20% or more of the purchase price. If the down payment is less than 20% and the borrower wants the best interest rate offered, the lender will require points at closing.
Type of Asset
The last situation where someone looking for the lowest mortgage rate will need to pay points is if they live in a condo. Lenders find more security in lending to people buying single family homes. To offset the risk of lending to a condo owner, a lender will offer a higher interest rate. To get a lower interest rate, a condo purchaser will need to pay points.
Related posts:
- How Do I Get The Lowest Closing Costs On My Mortgage Loan?
- Who Qualifies For The Lowest Mortgage Interest Rates?
- How Do I Get The Lowest Refinance Interest Rates?
- How Can I Get the Lowest Mortgage Rate When Refinancing My Home?
- How Can I Prepare To Get The Lowest Mortgage Rate Possible?
