How to find best mortgage rates and fastest closings during coronavirus

Home buying during the pandemic can yield surprising benefits. (iStock)

From falling inventory to competitive pricing, the coronavirus pandemic has impacted the real estate market in a variety of ways. One silver lining? Record low mortgage rates.

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The June 18 report released by Freddie Mac put 30-year new mortgage rates at 3.18 percent (2.58 percent for those seeking a 15-year mortgage.) This is a .71 percent drop from rates published in June 2019. While these refinance rates may seem small, they’re big news.

In April 2020, Freddie Mac published the lowest mortgage rate seen since 1971, and now they’re even lower.

For those with steady employment and a down payment at-the-ready, now is the near-perfect time to buy a home, as mortgage and refinance rates this low may not be seen again in our lifetime. Credible can help you compare mortgage lenders and discover the best refinance rates available today so you can lower your monthly payments and meet your financial goals.

How to get the best mortgage rates

American life has changed substantially following the COVID-19 outbreak but the steps on how to buy a home haven’t changed much at all. The very first place to start when contemplating a home purchase is to explore mortgage loans via an online aggregator such as Credible.com to compare rates and lenders.

WHY IT'S A GOOD IDEA TO REFINANCE YOUR MORTGAGE WHILE RATES ARE LOW

Don’t skip the shopping. Your primary financial institution may offer a good mortgage loan rate because of your customer status, but this doesn’t mean you shouldn’t shop around, as it may not be the lowest mortgage rate. Obtaining a rate quote from at least three lenders is considered a financial best practice, and new technologies such as Credible's comparison tool can make it easy to shop online in just a few minutes.

Shop with the best credit. Rate shopping is important, but you’ll get the best rates available if your credit score is strong. Homebuyers should aim for a credit score above 700 for the most competitive rates. Good credit (700-759) will yield a low rate, but excellent credit (between 760 and 850) means the most substantial savings.

Credit matters, especially when applied over a 30-year loan. The difference between the interest rate for good credit (3.13 percent) and excellent credit (2.91) percent adds up to a savings of nearly $7,000 over 30 years on a $400,000 loan amount.

WHAT CREDIT SCORE DO YOU NEED TO BUY A HOUSE?

Those on the cusp of credit categories (between fair and good and good and excellent, for example) should work extra hard to boost their credit score over time to save the most money on interest.

Bulk up the down payment.  A 20 percent down payment is considered standard, but the larger the down payment, the less the lender needs to loan. There’s no rule that says a buyer can’t put more than 20 percent down. With a lower loan amount, the borrower is considered less of a risk in the eyes of the bank, and will likely qualify for a lower interest rate because of this, too. See what kind of rates you qualify for today through this free online tool.

How to close your mortgage as quickly as possible

Closing dates are set between the buyer, seller, lender, and closing attorneys, but there are ways to expedite the closing and save money by doing so.

Any time closing gets pushed due to a borrower delay, homebuyers may have to pick up fees for rescheduling the closing and may have to pay the seller for the additional days on their mortgage due to the loan settling on a different day.

In order to close as quickly as possible, try the following:

Organize documentation in advance. Prior to serious rate shopping and starting the home search, take the time to organize all of your documents in a cloud service or on your computer desktop. Items such as tax returns, W2s, and bank statements should be readily available for both pre-approval and underwriting. If you have any other questions about documentation, seek help from a financial advisor.

MORTGAGE RATES TODAY: COMPARE HOME LOAN INTEREST RATES

Respond to loan office requests ASAP. Responding to your loan officer’s document requests on the same day (or even in the same hour) means your loan gets pushed through faster and results in a timely closing. Organizing your documents so you can instantly find and send makes this easy.

Embrace new technologies. E-signature services and scan-to-email functionality make it easier than ever to submit paperwork, even when social distancing limits in-person contact. Taking the time to learn and invest in these new technologies means document submission via fax or by mail won’t cause unnecessary delays.

GETTING A SECOND MORTGAGE? HERE’S WHAT YOU NEED TO KNOW

For those mortgage shopping two to three months out, taking the time to shore up savings and improve credit will yield the best mortgage rates in the short term future and personal rate of savings long after the purchase is complete.