Home Loans: Take Advantage of Lower Rates through March

Lenders across the country are reporting great news: interest rates on home loans are continuing to plummet through the month of March. Whether you are a looking for your first home or already have a mortgage, you can take advantage of this record drop in interest rates to save thousands of dollars and nick years off the life of your mortgage loan.

First-timers: Make Sure your Credit is in Shape

If you are a first-time homeowner, you can get a low interest rate on your home loan, provided you have a great credit history. So before you begin house hunting, you need to make sure your credit report is accurate and your credit score is high. You can start by ordering a copy of your credit report from one of the Big Three credit bureaus: Equifax, TransUnion, or Experian. Under federal law, you are entitled to one free copy of your report per year. So take advantage of it, and make sure your credit report is clean and free from all inaccuracies before you apply for a mortgage. You can dispute anything that is incorrect, but keep in mind that it can take more than 30 days for your report to be corrected.

Current Owners: Make Sure You Understand What Refinancing Means

If you choose to refinance your existing mortgage to take advantage of this record low rate of interest, you will basically be paying off your current loan and assuming a new one in its place. If you have a second mortgage, you can roll that in and create just one mortgage payment per month. This can create tremendous savings over the long haul; for example, dropping your interest rate by just 1% can save you hundreds in just one year, and thousands in the span of just ten years. As those who have home loans know, this is a tremendous savings.

One thing holds true for both first-timers and current mortgage holders who choose to refinance: you will be going through your home loan’s application process for quite some time. As those who already have mortgages know, the application process can be quite confusing and even, in some cases, overwhelming. Make sure you know your financial history and be prepared to back up some of your claims, such as income, with thorough documentation. If you have questions, don’t be afraid to step up and ask your loan officer for clarification. Although it seems daunting, the money you save will make the process completely worthwhile. So don’t be afraid to step up and take advantage of this low interest rate while it lasts!

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