Let’s just accept it – 2020 was a wild year for the mortgage industry, too. The rates hit lows you have never imagined before. But if you have plans to move into your new home this year, the past rates have become a part of ancient history. Of course, nobody has found a crystal ball that can predict the future. The vaccination and continuous progress against coronavirus have brought positive economic growth to the market. In addition to it, the mortgage rates are making comebacks.
Even though it is a small change before you, it can be a lot for some people. If you take a $300,000 loan for 30 years, a 1% increase (from 2.7% to 3.7%) might lead to mortgage payments of around $164. Over the loan term, the increase of 1% might cost you thousands of dollars. While you are online, shopping for the best mortgage rates in Houston, TX, the lowest interest rates are not everything. It is more important to get a loan estimate before you make an informed decision.
Many experts suggest that the rates are likely to stay flat throughout 2021, but strong economic recovery can change the game. What the borrowers worry about most is the monthly mortgage payment! If they lose their chance to get an affordable mortgage rate, things may seem difficult. So, let’s look at the ways that can bring cheaper rates for you.
Find a First-time Homebuyer Program
Various states offer multiple first-time programs. If your income is within a particular threshold, the program can pay down the closing costs. Some of the programs offer to bear the down payment. You can also find programs in the form of a second loan, and you can get low or no interest.
Besides these, veterans can apply for VA loans that have zero down payment and competitive rates. USDA loans are also another productive program for rural and suburban areas. If you are not buying a house in a rural area or do not have special employment, FHA loans are the best choice. Different types of buyers choose an FHA loan for a 3.5% down payment.
Maintain a Healthy Score
Your bad credit keeps you away from getting the best deal on mortgage rates. An excellent credit score is an ideal way to secure a home loan, in the first place. When your credit score is low, the mortgage rate is higher. If it is too low, you may not even qualify for the loan program at all. A great credit score is the only possible way to assure that you can successfully obtain the best mortgage rates in Houston. Even when your credit score is around 580, you will struggle to land a decent mortgage rate. So, improve your credit score.
The loan rates might again stay low if there is a sudden surge of the virus or bad news related to vaccination. Prepare your application, figure out what you want, and find a helpful mortgage lender in Houston, TX.