What four things will help you obtain a better mortgage rate? You’re looking to buy a home but the increase in mortgage rates have you a little on edge. Don’t worry, you are not alone. Most potential buyers are feeling a little unsure about interest rates right now.
Hi, I am Sherri Echols, Broker Associate with RE/MAX Bryan – College Station and I’m going to tell you the four things you can do as a buyer to get the best possible interest rate.
#1 – Have a high Credit Score. Having a good credit score is crucial to get a good rate. A credit score is a number from 300 to 850 that rates a buyer’s credit worthiness and predicts how likely you are to pay back your loan on time.. The higher the number, the better a borrower will look to lenders.
According to Freddie Mac, “When you build and maintain a strong credit, mortgage lenders have greater confidence when qualifying you for a mortgage because they see that you have paid back your loans as agreed.”
#2 – Choose the right loan type. Once you start shopping for homes, you will also begin shopping for mortgages to see what loan type is the best for you. There are several different types of mortgage loans that vary in rate and eligibility requirements. We will work with your lender to find the price range that works best for you. Then we go find the best home in that range for you!
#3 – Think about your loan term. This is how long it will take you to repay the loan before you fully own the property. This term will also affect your rate, monthly payment and amount of interest you will pay over the course of the loan.
#4 – Beef Up Your Down Payment. The General rule of thumb is the larger the down payment, the more likely you will have a lower interest rate. This is because most lenders see a lower level of risk when a buyer has put more money down to purchase. This gives you a bigger stake in the property or more skin in the game. Usually putting 20% down will guarantee a better interest rate.
If you’ve been working hard to improve your credit score and living frugally to save up for a big down payment call me. We need to get to work and find you the home you’ve been dreaming of.
I’m your Community Market Leader Sherri Echols, a helping hand for a happy home.
