How to Get the Best Mortgage Rate
Jul 25, 2017 | Mortgage Tips
Finding the right mortgage and getting the best rate can be a confusing process, especially for first-time homebuyers. There are many different factors that help you get the best mortgage rate for your financial situation. Use our tips below to ensure you get the best mortgage rate!
1. Compare Rates
Many real estate agents will direct you to lenders that he or she has worked with in the past. While these lenders are a great starting place, it’s important to shop around to ensure you are getting the best deal. Mortgages are a long-term commitment, and you don’t want to miss something just to save time. While a .5-percent difference may not sound like much, it will quickly add up. This difference could help you save around $60 a month, which equates to $3,600 in the first 5 years.
2. Boost Your Credit Score
Your credit score has a lot of impact on your mortgage rate. The higher your credit score, the better your interest rate and the more loan choices you will have. To help increase your credit score before purchasing a home, be sure to be mindful of how much you are spending with your credit card, and pay all of your credit card bills and student loans in full and on time. The lower your credit score, the more you will pay in interest over the span of your mortgage.
3. Beef Up Your Down Payment
The idea of saving for a down payment may sound like a challenge, but there are many things you can do to pay more upfront. This, in turn, will help you secure a better interest rate. In addition, a larger down payment may even save you the cost of mortgage insurance, which some lenders charge if your down payment is less than normal.
4. Consider How Long You’ll be in Your Home
If you know you’ll be in your home for a relatively short period of time before selling, you may want to think about an adjustable rate mortgage. You can benefit from initially low interest rates attached to these loans and sell your home before your rates reset and go up. But it’s important that you will only be in your home for a short period of time. Many homeowners who banked on this type of loan in 2008 suffered from rate increases when they were unable to sell their homes.
If an adjustable rate mortgage sounds like a risk, you may want to think about a 15-year mortgage. While the payments will be higher, it comes with a much lower interest rate, saving you thousands of dollars in the long run.
Apply for a Mortgage Today
If you’re shopping around for the best mortgage rate, look no further than Home Point Financial. Our experts will help you choose the best loan option, with the lowest possible interest rate. Be sure to contact us today for more information!