Are you planning to buy a house? If so, you have to compare mortgage rates and lending companies to get the best value for the home you are eyeing. Lenders follow certain factors when it comes to giving a loan for this type of purchase.
Mortgage expert City Creek Mortgage cites the following ways you can get a better rate.
Monitor Your Credit Score
Like any other type of loan, you’ll need a good credit score to get the best possible rate a lender offers. This tells creditors how responsible you are with money; the higher this is, the better your chances. Raising your score may take time, but it will be worth it, especially for your long-term financial well-being.
Higher Down Payment
Paying a down payment up to 20% of the house price may seem difficult, but it may help your long-term financial outlook. Doing this may mean smaller monthly mortgage payments and better interest rates. You may end up paying more if your down payment is significantly lower.
Save enough money to make a big initial payment.
Good Employment Record
Some banks and lenders won’t take a risk on a borrower with an irregular employment record. This may signify that a person can’t keep a job and is unable to pay the payments on time. Before you apply for a mortgage and negotiate a rate, have a steady source of income or job.
Stay with the same company for at least two years (the longer the tenure, the better).
Choose Short Term
Before you choose a mortgage rate and term, factor in your long-term financial plans. An adjustable rate is an option to consider if you are thinking of quickly trading up or selling the home within seven years. An introductory period of about five to seven low interest should be atop your list of choices.
These are the options you have when it comes to finding the ideal mortgage rate that is within your budget and long-term financial plans.