Finding and qualifying for a low mortgage rate can make a huge difference in your monthly mortgage payment, so it makes sense to invest your time and effort up front. There are a number of factors that influence mortgage rates and ultimately how much you will pay; once you understand how everything works together, you will be in a position to make an informed decision about which mortgage is right for your situation.
Interest rates move in cycles and are usually either on their way up or on their way down. While no one can predict the future with complete accuracy, financial experts use a number of indicators to forecast the movement of market interest rates. The best time to secure a low mortgage rate is when interest rates in general are low, but do not despair if rates are currently on the high side. If interest rates seem to be moving downward, consider mortgages with shorter terms, such as adjustable rate mortgages. This way, you can benefit from a drop in interest rates when your adjustable rate mortgage resets at a lower interest rate down the road. If, on the other hand, market interest rates are on the rise, it makes sense to lock in a longer term mortgage now to protect yourself from interest rate hikes in the near future.
To make sure you ultimately find a low mortgage rate, be prepared to spend some time obtaining mortgage quotes from several lenders; in this way, you will know which mortgages are a good deal and which just serve to line the pockets of the lender. The Internet is a great place to start obtaining quotes for low mortgage rates, but be sure to talk to local lenders either on the phone or in person, as well. Before applying for a mortgage quote, make sure that you have the necessary documents handy: your most recent paycheck stub, most recent income tax returns, savings and investment account balances, and a list of your current expenses, such as car payments and credit card bills.
As you talk with different mortgage lenders, you will learn their financial language, but be sure to ask for clarification if you don't understand something. In particular, make sure that you understand how the options for low mortgage rate offerings differ with respect to loan terms (which can run from five years to thirty years, in general) and the down payment required.