Low Rates Make 'Dream' Cheaper Than Ever
Amid all the bad news about mortgage defaults and foreclosures, there's good news for qualified borrowers. Thanks to the Federal Reserve, you can lock in rates lower than 5% if you're buying a home or refinancing a loan.
The average interest rate on a 30-year, fixed-rate mortgage has fallen to 5%. You could pay as little as 4.75% on a 15-year loan.
By now, everyone knows the importance of due diligence before agreeing to a mortgage. This time around, lenders are scrutinizing applicants' incomes, credit scores and home values more closely.
Buyers with a 20% down payment and good credit will get the lowest rates. There are loans that allow smaller down payments if you know where to search and which lenders to trust. These four steps will put you on the right track.Step 1: Figure out the type of mortgage that's best for you Stick to 30-year fixed-rate mortgages, even though interest rates will be higher than those of adjustable-rate mortgages. Adjustable-rate mortgages are tempting if you plan to move within a few years. But your rate could increase as inflation grows, which is more likely now that the Fed is printing money to boost the economy. A 15-year mortgage comes with lower rates, and higher monthly payments that will save you a fortune in interest if you plan to stay in your home. But if you want flexibility, you can get the same advantage by making extra principal payments on a 30-year loan. Step 2: Understand fees and costs
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV