Compare The Best Mortgage Rates in Clarinda, IA

Compare Clarinda, IA Home Loan Mortgage Rates

Whether a prospective borrower is checking out mortgages in Clarinda, IA 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.

Different Types of Home Loans Available In Clarinda, IA

There are different loan facilities for the many buyers available. The loan products maybe fixed-rate mortgages or variable mortgages. Here are some of the most common loan products and for whom they are best tailored:

Fixed-rate mortgages - In Clarinda, IA, interest accrued from these loans does not change during its term of repayment. With fixed-rate loans, your rate remains fixed for the life of the mortgage. It will remain constant monthly and yearly. The same applies for long-term loan facilities.

Adjustable-Rate Mortgage Loans (ARM) - As the name of this loan suggests, the interest rates change from time to time. Normally, the interest rate for this type of home loan will change yearly. In practice, the interest rates applicable for ARM remain fixed up to a fixed duration, and change afterwards. For that reason, this loan product is known as a “hybrid”. The loan product starts with a fixed rate, and later on switches over to an adjustable rate. Consider the following situation, a 5/1 adjustable rate mortgage means that the interest rate remains fixed for the first five years and after that it begins to change yearly.

FHA Mortgages in Clarinda, IA

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 Clarinda, IA, 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.

Home Loan Refinancing in Clarinda, IA

If you wish to refinance a mortgage in Clarinda, IA, you should understand that the actual process involves applying for a separate, new mortgage. Keep in mind that you may need to pay for certain fees such as closing costs when completing this process. If your primary goal is to get a lower rate of interest via refinancing, take a moment to consider if the fees will allow you to offset the potential savings you want.

There is one exception if you wish to refinance by changing a fixed-rate loan into an adjustable-rate loan. Here, it is more common that rates will increase rather than decrease in the future. If you want the best possible rate on your home loan, the lending company needs to view you as a low-risk candidate. You should keep debt-to-income low and your credit score stable and high to give yourself the best chance at a fixed-rate loan. With all of that said, it is still possible to get home loan approval in Clarinda, IA even if you don't meet all criteria.