February 3rd, 2015 3:12 AM by Jackie A. Graves
Timing is everything
in life—and it’s certainly key in getting a good home loan. A low-interest rate
can save you a bundle over the life of a 30-year loan.
Because interest rates
fluctuate daily, it’s difficult to know exactly when to pull the trigger. There
are things you can do to improve your chance of success.
Interest rate cycles
Interest rates run in
cycles. Your goal is to take out your loan when the cycle has reached bottom
and rates are at their lowest. Comparing prices among lenders is essential.
Government-sponsored mortgage giant Freddie Mac conducts and posts weekly surveys
to track the national mortgage market.
You can also find mortgage rates in communities throughout the country
on a variety of websites, including realtor.com®.
When playing the
rate-change game, it’s very important to be aware of economic trends. Consumer
confidence, reports on employment, fluctuations in home sales, and other factors can influence interest rates. If changing economic trends
reflect strength and low unemployment, interest rates may increase.
departments and think tanks such as the U.S. Department of Labor and the
Pew Research Center regularly review and report on consumer confidence,
employment levels, and other economic trends. Check these publications
frequently before you apply for a loan.
Supply and demand
Mortgage rates are
also affected by the laws of supply and demand. As demand increases for
mortgages, interest rates rise. When the economy is slow and unemployment
levels increase, interest rates tend to fall. Bad news for the economy can be
good news for consumers shopping for low-interest rates.
Keeping up with
financially geared magazines and publications can help you determine when the
economy might be ripe for good loan deals. You can also get important real
estate and financial news through the news portal at
Locking it in
When you’ve shopped
around and found the right interest rate, it’s time to lock it in to make sure
it doesn’t go up while you’re waiting to close on your purchase. Your lender
may charge a fee to lock in your rate, so consider that when comparing loan costs.
Make sure the lock lasts long enough for the loan to close and get it in
When you shop for
loans, be sure to consider closing costs along with interest rates. A low rate
with high closing costs will cost you more in the long run. It’s also useful to
compare annual percentage rates, which represent the total cost of credit
on a yearly basis.
And be sure to compare
only loans of the same type and terms.
By: Angela Colley | Updated
from an earlier version by Emmet Pierce
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article click here