When getting a mortgage, nobody wants to pay more than they have to. The interest rate that you pay on your mortgage will dictate how big your monthly payment is, as well as how much money you pay to your lender for giving you the loan over the length of the loan. The lower your rate, the less money you'll pay in the long run. Here are some tips for getting a rate that is as low as possible.
Fix Your Credit
One factor that plays a big role in your interest rate is the credit score of all the people applying for the loan. If you and your spouse are buying a home together, it will be beneficial to pull each of your credit reports and find things that could be wrong with them. Don't wait until you are ready to purchase a home to fix your credit, since there is no quick fix to a bad credit score. Start working on it as far in advance as you can.
If only one person applying has a bad credit score, consider not having that person listed on the loan. You won't be able to factor the other person's income into your debt-to-income ratio, but having a solid credit history can result in saving more money over time with a low interest rate.
Apply For Government Loans
Instead of trying a traditional lender for your loan, try applying for a government loan. These include FHA or VA loans. They often have lower interest rates and small requirements for a down payment, which can make it easier to apply for the loan. Being a former member of the military or buying a home for the first time can help you meet the requirements of these loans, which may not be for everybody.
Use a Mortgage Broker
Do you have the time to apply to several lenders and shop around for the best rate? You probably don't. That's why it can help you out to use a mortgage broker when getting your home loan. They will do the difficult part of finding the lender that offers the best possible rate for you. While mortgage brokers do take a small percentage for their services, you could easily save more than that over time if they find a better rate.
For more info on finding a loan that will work best for you, reach out to a local mortgage broker for assistance.