Getting an excellent mortgage rate may not be as far off as some buyers fear. Though mortgage rate averages do rise and fall with time, it’s not always a good idea to wait and see if they go down to purchase a home. Instead, there are steps that can be taken today to get a mortgage with lower rates and save a significant amount of money over the lifetime of the loan.
Check the Credit Score
Take the time to check credit scores to make sure the score is as high as possible. Having higher credit scores can improve rates on your mortgage and help you save money. Make sure there isn’t anything on the credit report that shouldn’t be there and look at all the different types of debt to see what can be paid off. By taking the time to improve the credit score, it’s possible to get much a lower mortgage rate.
Pay Down Existing Debt
One way to boost credit scores and reduce mortgage rates is through paying off debts. There are different techniques that can be used to pay off debts, such as the snowball method, so see which one fits the best. Take the time to go through all of the finances to make room for more payments on debt so they can be paid off as quickly as possible and free up more credit. This is likely one of the fastest ways to improve a credit score, though it may be necessary to follow up with creditors to make sure the credit report is updated.
Save for a Larger Down Payment
While it might be possible to get a mortgage with a lower down payment, it may end up costing more in the long run as it can mean a higher mortgage rate. Saving up more money before buying a home can mean lower rates, so it’s possible to save even more money while paying off the home. Try out a variety of methods to save more money and to be prepared to apply for a mortgage.
Avoid Major Purchases
Major purchases can make it harder to be approved for a mortgage, as they can increase the amount of debt a person has. On top of this, they can mean the person isn’t approved for a mortgage after all, even if they had a pre-approval. Large purchases include anything put on a credit card, buying a car, buying new furniture for the home, and more. It is far better to avoid making any large purchases until after closing on the home.
Compare Different Rates
Don’t forget to shop around and compare different rates before settling for a lender. It may be possible to get a much better rate by doing this, as some lenders will offer lower rates compared to others. In certain situations, lenders may be willing to reduce their standard rate, so it does make sense to look into as many options as possible.
If you’re ready to buy a home, but you’re worried about mortgage rates, now’s the time to look into what you can do to lower them. There are tons of things that can be done to make a difference, including those listed here. Take the time to consider each one and work with the lender to get the lowest mortgage rate possible.