July 15th, 2020 9:48 AM by Jackie A. Graves, President
Most Americans have taken a hit to the wallet as a result of the coronavirus pandemic’s impact on the economy. Global poverty could increase by as much as 1.5 percent, and global trade continues to decline. North America is expected to suffer significant losses due to lower trade, according to the United Nations Industrial Development Organization.
The U.S. housing market is also feeling the effects of COVID-19. Interest rates are at a record low, meaning that despite a struggling economy, now might be the best time to score a record-low mortgage rate. Taking advantage of a low rate could potentially save you thousands of dollars. If you want to get the best deal possible, you should take the time to review multiple lenders. Shopping around is a vital step that many homebuyers skip.
Shopping around could save you thousands of dollars
One percent seems like such a small number, but it can add up over time. Let’s look at a quick example.
A simple one percent difference on your interest rate could save you more than $80,000 over the life of your home loan. That’s a lot of vacations or a lot of money you could invest in retirement. Don’t just accept the first-rate offered by a single lender.
If you're ready to purchase a new home, taking advantage of lower interest rates (even if it’s just one percent) could save you thousands of dollars.
The interest rate shouldn’t be your only concern
While your mortgage interest rate will likely have the most significant effect on your loan, it’s not the only number you should consider. When you’re researching different lenders, don’t forget to ask them about fees and other associated costs.
Typical fees associated with a mortgage loan include (but are not necessarily limited to):
You can pay some of these up-front, while some lenders allow you to wrap these expenses into your loan. Adding the fees to your mortgage could increase your loan balance, monthly mortgage payment, and total paid over the life of the loan.
Don’t forget to check out the listed annual percentage rate (APR) with lender offers. Percentage rates represent the total cost of your loan, minus some fees. The APR can offer a broader look at how much your mortgage will cost.
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Buying a home is an expensive investment, but that doesn’t mean you have to pay top dollar for your purchase. Spending a little extra time reviewing lender options could save you tens of thousands of dollars.
To qualify for the best rates, here are a few things you should do:
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