Who Offers the Best Mortgage Rates in 2009?
© 2009, Brandon Cornett. All rights reserved.
Reader Question: We are going to buy a home later this year, and I wanted to know who offers the best mortgage deals. Is there a particular lender that has the best rates for first time buyers?
The U.S. government offers the best mortgage deals. They will finance 100% of your home and even give you a little extra money to spare. It’s part of the mortgage bailout program. Just kidding.
In reality, there is no way for me to answer this question, because mortgage lenders change their rates all the time. On top of that, different borrowers will get different rates from the same lender (based on credit scores and other factors). So the best I can do is tell you how to shop for the best rates on a mortgage loan.
The first thing you need to realize is that the interest rate you receive is only partly determined by the lender the choose. Your credit score, debt-to-income ratio and other qualifying factors play a major role as well. For example, a person with a credit score of 780 could probably get an interest rate of around 5% right now, maybe even less. But a person with a score of 650 won’t qualify for those same rates. The lender will offer them higher rates based on their credit, or will turn them down outright.
So if you want a lender to offer you the best mortgage rates they have, you’ll need the following things (at a minimum):
- An excellent credit score, ideally above 750.
- A favorable debt-to-income ratio (i.e., not carrying too much debt).
- A sufficient down payment, probably 20% to get the best rates.
Getting Online Offers to Find the Best Rates
If you want to find out who has the best rates to offer you, do yourself a favor and use the Internet. There are several websites you can use to get offers from different mortgage companies at once. Not only will this save you time, but it also gives you access to a larger pool of lenders. You can find some of these helpful websites on the mortgage quotes page of our website.