Buying a home is probably one of the biggest investments you will ever make, no matter what part of the world you live in. That is why it’s so important to keep your mortgage rates and manageable levels and under control.
It’s important to note that a mortgage isn’t something to be gotten into lightly, and the mortgage rate you end up with should be something you can handle. Read on below for a list of tips to help get the lower mortgage rate you deserve.
1. Watch that Credit Score
Maintaining a good credit score is key to getting the best mortgage rate around. Not only can a low credit score end with you not being approved for a home at all, it can also saddle you with high mortgage rates, if you are approved. Lenders look at your score, and the higher it is, the less of a risk you seem, so check that credit score before you ever begin your search for a home of your own.
2. Go in with a Long and Consistent Work Record
There is nothing better than having a long, consistent work record on top of having a great credit score. Mortgage lenders want to be able to look and see a proven track record of you not only having a steady job, but of you working at one job for more than a few months at the time. The better your job history is, when combined with steady credit, the lower the mortgage rate you receive will be.
3. Ask Your Bank for a Lower Mortgage Rate
Many borrowers make the mistake of thinking that just because the bank says your mortgage rate is this much, that it is set in stone. That’s not necessarily true. Ask your bank to lower your rate and see what they say in return. You could be nicely surprised and all they can do is say no, if they aren’t willing too. Which brings us to the next number on our list.
4. Shop Around to Find the Best Rates
Don’t make the mistake of thinking that you are roped in by the first mortgage rate you are given. Shop around and find the one that works the best for your needs. Remember, shopping around for a low mortgage rate is much easier than it was even 10 years ago. Take your time, do your searching online and then go with the one that gives you the best offer.
5. Put Down a Heftier Down Payment
It’s important to take into consideration how much of a down payment you are giving the lender to lower your mortgage rate. Those who buy houses in the lower priced categories, usually get lower rates. The higher priced categories usually mean the loan is a higher risk, so the mortgage rate is higher to cover the lender. If you are in the high category on the house you are purchasing, consider putting down a heftier down payment to lower that rate.
6. Shorten the Term of Your Loan
Shortening the term of your loan is another way to end up with a lower rate on your mortgage. Most consumers go with the standard 30-year loan, which has an average rate of 3.45 percent or better, while shortening the loan to say 15 years, could possibly get you a 2.70 percent rate. While that might not sound like a lot on paper, trust me, it is in the long run.
These are just a few of the top tips out there to help you get a lower mortgage rate when you are purchasing your dream home. Follow them carefully and you will be living in style in no time at all.