How To Get the Best Mortgage Rate for You

Published February 26th, 2024 by IREAF

Today’s current mortgage rates can show you overall trends, but what really matters is the rate you get on your own mortgage. You could decrease your monthly payment and even save thousands of dollars in interest over the years by getting a low mortgage rate. Here’s how to get the best rate for you:

  • Boost your credit: Work on improving your credit score, which can improve your chances of a lower interest rate. Lenders are looking for borrowers with a proven track record of repaying their loans.
  • Increase your down payment: If you can, increase what you put down on the home. The less you borrow, the less risk you pose to the lender (and the more equity you’ll have in the home from the outset).
  • Borrow less: You may be able to get a lower rate by borrowing a smaller amount. While a bigger down payment can help, so can purchasing a less expensive home. Consider whether you truly want to buy at the top of your price range or if you can rein in your budget a bit.
  • Explore your options: Different mortgages tend to have different interest rates, and there are alternatives to the traditional 30-year fixed. You may be able to get a lower interest rate by choosing an adjustable-rate mortgage (ARM), a 15-year mortgage, or a government-backed option like an FHA loan.
  • Compare lenders: Shop around to see what lenders will offer you. Using an online prequalification tool will give you a good idea of what real-world rates you can expect.\
  • Pay points: Paying points on a mortgage is a way to buy down your rate by making a payment upfront. The amount you’ll pay and how much you can save will vary by lender.

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