With so much involved in purchasing a home, it can be easy to overlook details that matter. One task that pays to pay attention to time is learning how to find the best mortgage rate. Skipping this step can prove to be a costly mistake. If you’re looking to unlock the mysteries of a great mortgage rate, the following mortgage tips can help you make the cut…
1. Improve Credit Score
Your credit score will make or break a deal while qualifying for a mortgage rate. Know where you stand when it comes to your credit rating, and take steps to improve it if needed. Lenders and mortgage brokers offer a wide variety of loans with varying interest rates. If your score falls in the desirable area, you qualify for a lower rate. Start with knowing your number.
2. Compare Rates
Most mortgage loans come from one of the following sources: banks, credit unions or mortgage companies. There are literally hundreds of lenders who may want to do business with you. Some comparison shopping can save you thousands of dollars. It’s a good idea to start with at least 4 to 5 lenders. FICO allows multiple credit inquiries within 30 days for the same loan without hurting your credit rating, so go ahead with your quest to find the best lender in the market.
3. Negotiate Price
One of the mortgage tips worth mentioning here is that quotes you obtain from lenders can be modified. Any rate can be negotiated as long as you know how to do it. So, if you have multiple quotes from various lenders, and if you want to reduce the rate, leverage the competition for your business to your advantage. Negotiating for lower rate can be tedious, but by doing your homework, you can walk into a lender meeting like a boss.
4. Apply For Government Home Loans
If you are eligible for government loans, your final rate will be significantly lower than average. These home loans are backed by government, so if the borrower defaults, the lender is covered. In essence, such loans are less risky than conventional loans and hence lenders tend to offer then for lower rates. Learn about special assistance programs as well. These programs may offer low interest rate loans, interest-free down payment options and special pricing on some government-owned properties.
5. Stay Knowledgeable
Staying knowledgeable means being on high alert every time you hear news that the mortgage rate is expected to increase in the near future. If there is going to be change in rate, it may be necessary to speed up the process of obtaining financing and selecting a rate. On the flip side, be ready to also take advantage of a lower rate if market predictions suggest such.