When it comes time to purchase a home, many individuals rely on the assistance of loans from mortgage companies to achieve the dream of home ownership. Of course, each individual’s financial situation is different, and as a result, the loan rates available to each person can also vary.

When it comes to finding the best loan rate, one should first be aware of their own financial situation. After all, if one is able to afford the higher monthly payments of a 15-year mortgage loan, they may be able to secure a lower interest rate than would be offered on a 30-year loan, saving money over the long run.

Depending on an individual’s financial situation, there are other options available to secure a lower mortgage rate. The ability to make a larger down payment and having a high credit score are well known ways to lower one’s mortgage rate, but individuals can also pay points to lock in a lower rate.

When buyers are shopping around with different mortgage companies to find the best rate, it is important to effectively communicate one’s current financial situation and desires. As Motley Fool so wisely noted, “If one lender gives you a quote for a 15-year loan and another a quote for a 30-year loan, the two rate quotes won’t be fair comparisons.” Being aware of your financial situation can help you know which rate that will work best for you.

(Image via Age of Innovation)