15:50 18 March 2013
Many first time homebuyers get so caught up in the excitement of purchasing their first home that they don’t care what the interest rate is as long as the lender says “yes”! This attitude caused a lot of homeowners to end up in foreclosure when high interest rates put their monthly mortgage payments beyond affordability when the economic crisis hit.
So just what is the purpose of a mortgage interest rate anyway? Well, when you purchase a home, it is not likely that you will be able to pay the entire cost in cash at closing (not most of us anyway).
This is why it is so important to compare lenders and get the best possible interest rate that you can. Remember, your credit rating will determine how good of an interest rate you qualify for, so make sure your credit score is in great shape before you apply.
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