Getting the best mortgage rate usually depends on your credit score, loan amount, which mortgage product, and the location and type of your property, among others. Rates will vary from lender to lender even though borrowers are with the same credit score.
This article will lay out some practical tips that may help you get a better rate as far as your mortgage is concerned.
Improve Your Credit Score
Your credit score is a vital aspect when taking out loans, and even more if you’re planning to buy a property. Lower credit scores put you in danger of being charged higher interest or worse, you may not be approved of a loan. Bringing your credit score from 659 to 680 will translate to a drop of 0.60% in interest! That’s already a huge saving on your part.
As such, a surefire way to improve your credit is to always pay your bills on time. If you are in the position to pay them in full, so much the better. If you don’t have a credit card yet, ask someone to add you as an authorized user and build your credit from there. Also, request a report regarding your credit score to check for errors and to see where you stand. At least you can be aware of which part you need to prioritize.
Save Up For the Down Payment
Mortgage rates are sometimes negotiable especially if you’re willing to put up a large payment. Why? Because the mortgage provider doesn’t have to shell out as much to cover the entire purchase value of the property, they don’t have as much exposure.
Homebuyers who put up a large down payment will most likely make good with their mortgage payments because they’re already too invested to simply let go of it.
Keep Your Income Steady
Mortgage lenders will award you low interest rates if they see that they can trust you. So, what better way to show them that you’re reliable than to show proof that you are capable of maintaining a steady stream of income, or better yet, can increase it.
Consider Getting ARMs
Market conditions are always fluctuating and if you just consider that, getting a fixed-rate loan might be a safe bet but mortgage lenders somehow reward the risk you’re taking when you choose Adjustable-rate Mortgages by offering lower rates.
Besides, if the market conditions improve in the future, at least you won’t be tied up to any fixed-rate interests.
Compare, compare, compare
As prospective homebuyers, we understand that sometimes the excitement gets the better of us, especially if we’re first-time buyers. However, don’t let the prospect of you becoming a property owner take your eyes off the prize. Or in this case, the interest rate of your mortgage lender.
At Total Lending Concepts, we’re confident we’ll be able to provide you superior customer service and a great rate! Contact us today to learn more.