There are numerous factors that go into the rate of your mortgage loan. In fact, you may have done something today that will either help or hurt your chances of landing a great rate. Don’t guess how to prepare. Instead, take charge with these five ways to get the best rate possible on your mortgage loan.
Tend to Your Credit Score
One of the easiest ways to be on your way to a great mortgage rate is by keeping your credit score over 760. Happily, you don’t need to make a bunch of money to do this. You DO need to make all payments on time every month, avoid high balances on your credit cards, and don’t apply for too much credit. Check your credit report every six months for errors, and if you see any, dispute them with the bureaus.
Keep Your Job
Few lenders want to lend money to people who have no way of paying it back. If you’re employed, stay that way. Hopefully, you can show two years at the same job and a steady income from one month to the next.
Stash Money for a Down Payment
A hefty down payment equals a greater number of options for you, with some of them being more financially attractive. In addition, if you don’t have a large enough amount of the home’s value to pay down, you’ll probably have to pay private mortgage insurance (PMI), which adds a significant amount to your monthly payment. Find ways to save money out of every paycheck, and consider working overtime or getting a temporary part-time job to make your savings grow quicker. No need to worry if you don’t have anything to put down, there are programs that offer 100% financing!
Shop Around
Some lenders may offer loan programs that others don’t. For example, VA loans or USDA TN loans might be the best options for you – but they can’t help you if the lender you work with doesn’t sell them. Talk to more than one lender to find out which of the mortgage loans you qualify for will offer you the best rate.
Understand Your Options
You may initially think you’ve found the right loan, but make sure you understand everything involved. This means knowing the difference between fixed and variable rates, the loan requirements, availability, and the length of the loan. Looking closely at all this information against your income and need will assist you in making your best decision.
Getting the best rate on your mortgage loan is important to your budget, so you should make every effort to do it. By doing some of this legwork on the front end, you will be able to know and understand your options – and choose wisely.
Are you in the market for a mortgage loan and want to review your options? Call MIG today! We have professional loan officers standing by to answer your questions, as well as a wide variety of loan programs available.
