Compare The Best Mortgage Rates in Novi, MI
Compare Novi, MI Home Loan Mortgage Rates
Whether a prospective borrower is checking out mortgages in Novi, MI because they want to purchase their first home or refinance the mortgage on their current home, it's vital that they get the best mortgage rate possible. That's made much easier by MyRatePlan, which has all the data and tools borrowers need to check out mortgage rates and compare what's available from different lenders. By looking at all their options first, the borrower can make sure that they pay as little interest as possible on their home loan.
How Borrowers Can Get the Best Home Loan Rates in Novi, MI
For the typical homebuyer in Novi, MI, a mortgage is going to be a necessity to fund their home purchase. Even the most inexpensive homes on the market still tend to cost $50,000 or more, which is more than most people have on hand in their bank accounts, making it extremely difficult to pay for a home with cash. That's why a home loan is such an important part of the purchasing process. A small interest rate difference can make a massive difference over a loan with a term of 20 to 30 years. Real estate agents are often able to recommend their own preferred lenders that they know from past deals, but it's best for homebuyers to take these recommendations with a grain of salt. The real estate agent wants the deal done as soon as possible, but the homebuyer wants the home loan with the lowest interest rate, and those goals don't always align. Patience is a virtue for homebuyers looking for the right mortgage lender, and they should always check out rates online first for a full comparison. The MyRatePlan home loan interest rate tool is great for locating the lowest mortgage rates throughout Novi, MI. After the homebuyer finds the lowest rate, it's all a matter of making sure they have a credit score high enough to qualify.
Types Of Home Loans Available In The Novi, MI Area
There are many types of loan products which are available to a variety of home buyers. The options may include both variable-rate mortgages and fixed-rate mortgages. Below is some more information about the two most common types of loans and who they are more geared towards.
Fixed-Rate Home Loans In Novi, MI - A fixed-rate mortgage will have the same interest rate throughout the entire loan term. This means that the amount of your monthly payment will remain the same each month until you're done paying off the loan. This is even true for loans as long as 30 years. The interest rate and the monthly payment will remain the same throughout the whole loan term.
Adjustable-Rate Home Loans In Novi, MI - An adjustable-rate mortgage, or an ARM for short, is a type of loan where the interest rate can adjust or change at different points throughout the loan term. Generally, the interest rate on an adjustable-rate mortgage has the ability to change each year after the initial fixed-rate period. Oftentimes, this is referred to as a "hybrid" product. Hybrid ARM loans are ones which start off with fixed interest rates and then switch to an adjustable rate. As an example, a 5/1 adjustable-rate home loan can carry a fixed rate on the loan for the first five years and then may be adjusted each year after. This is what the five and the one signifies in the name.
FHA Mortgages in Novi, MI
Deciding between fixed-rate mortgages and ARMs isn't the only choice a prospective borrower must make. They also need to consider whether they want to stick with conventional mortgages or get a government-insured mortgage. With conventional mortgages, the contract is between the lender and the borrower. If the borrower defaults, the lender could lose money. With government-insured mortgages, the government is backing the mortgage and helping to cover the lender if a default occurs. This type of mortgage includes USDA loans, VA loans and FHA loans.
Federal Housing Administration (FHA) mortgages have mortgage insurance provided by the FHA, which is itself managed by the government's Department of Housing and Urban Development (HUD). With FHA loans in Novi, MI, it's not just first-time buyers that can qualify but any type of buyer. Borrowers benefit from FHA loans because down payments can be just 3.5 percent of the home's price, but on the other hand, they also need to pay the mortgage insurance every month, which makes their home payment a bit more expensive.
Refinancing Mortgages in Novi, MI
In Novi, MI, refinancing a mortgage loan is like applying for a new one. The end result of this is that one may have to pay closing costs or any other fees required. This is, however, done when the loan is approved. If one seeks to refinance for the sake of enjoying lower rates, they should carefully consider the consequences of refinancing. The extra costs may offset some savings that one sees from refinancing. The exception to this rule is when one is refinancing from an adjustable rate loan to a fixed-rate loan. The reasoning is that the rates are more likely to go up in the future rather than going down.
Appearing as low-risk is the best strategy for those looking to refinance their mortgage. This can be achieved by keeping one's credit score above 700, keeping one's debt-to-income ratio low, and applying for a fixed-rate loan facility.