Do Research for the Best Mortgage Rates

If you’re looking for great mortgage rates, one of the best things you can do is actively compare different lenders’ rates. Government sponsored and private lenders will offer varying mortgage rates, and it’s up to home buyers to decide what is best for them.

The Importance of a Strong Down Payment
Good credit and steady employment can really help you secure good mortgage rates. Did you know that qualified home buyers can secure a mortgage and only put down a 3% down payment nowadays? Fannie Mae and Freddie Mac will both purchase up to 97% of mortgages! But remember, a low down payment mortgage will incur higher interest on the mortgage.

The more money you can spend on your down payment, the better off you’ll be.  Fannie Mae recently initiated a “start-up mortgage” plan. If you can put down 5% of your down payment but you have a small salary, you can qualify for this plan. Of course, only a Fannie Mae approved lender can offer this deal.

Look at the Private Market
There is also a wealth of options available in the private market. Washington Mutual started a home loan program wherein buyers who can put down 10% down payment on their homes don’t have to pay for mortgage insurance. Instead, the savings and loan places the mortgage costs into the interest rate. The result: you get a tax-deductible mortgage!

You can even take out two loans. This is called taking out piggybacked loans. They’re also called 80-10-10s. In this model, you put down 105 of the value of the home. Then you take out a 30-year fixed mortgage loan for 80% of the value of the home. Then, you take out a fixed rate 15-year mortgage for the 10% that is left over. This will cost more than regular mortgages, but it’s a lot cheaper than paying for mortgage insurance.