Whether you’re buying your first home, or looking to buy a more affordable place to raise a family, buying a home is an exciting milestone however, it can also be quite expensive and challenging this is especially true when you’re trying to get into the housing market for the first time.
But with a little planning and knowledge about mortgage rates for your area, you can lower the cost of your mortgage and make buying a house that much easier on your financials. Here’s everything you need to know about how mortgage rates affect the cost of your loan, and what you can do to lower the cost of your mortgage.
What is a Mortgage Rate?
A mortgage rate is simply the interest rate associated with borrowing money to buy a home more specifically, a loan officer will calculate the mortgage rate they charge borrowers by finding the rate of interest they would be charged if they borrowed the amount of money they are asking for.
So mortgage rates are very important, because they impact the overall cost of buying, owning, and financing a home with mortgage rates changing frequently and dramatically, it may be difficult for you to figure out exactly what is going on with mortgage rates and where you stand.
We’ll go over the basics, but one of the best ways to get a really clear understanding of mortgage rates is to talk to a mortgage loan officer plus loan officers can give you the lowdown on mortgage rates and what impact they have on your financial health.
Why Does Mortgage Rates Matter?
Homeownership makes up a significant chunk of many people’s budgets when you take out a mortgage, you are borrowing a significant amount of money with the goal of owning a home at some point in the future.
However, there are many costs associated with home ownership that do not factor into the price of the house, one of these costs is the cost of the mortgage.
The basic cost of owning a home is comprised of mortgage interest, home insurance, maintenance, taxes, and other fees, you can see how all these costs add up quickly and this is why mortgage rates matter.
The higher your mortgage rates saskatchewan are compared to the rates offered by competing lenders, the less affordable your home purchase will be for you and the lower your mortgage rate is, the more affordable it will be for you to buy a home now and in the future.
How to Lower the Cost of Your Mortgage
- Shop Around – One quick way to lower the cost of your mortgage is to shop around and see what mortgage rates the banks and mortgage companies are offering you. There are many mortgage providers out there and shopping around can ensure you are getting the lowest rates available.
- Shop Around for a Mortgage Company that Offers Direct – Another way to lower the cost of your mortgage is to shop around for a mortgage company that offers direct. This can help you avoid the added fees that come with going through a middle man, like an origination or funding fee.
- Shop Around for Better Rates – Finally, if you can’t find any lenders that are offering competitive rates, shop around to see if any of them are offering better rates. Ideally, you would like to get the lowest rate you can find that is still acceptable for your financial situation.