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One of the biggest things that homebuyers are concerned about when applying for a home loan program is the mortgage rate – a rate that you will have to pay to the lender over the life of the loan. The lower the rate the better you can save over the life of the loan. But getting the best mortgage rate is not as easy as it seems.
Well, that does not mean you can’t get the best mortgage rates Houston.
You can get the best rate by following these tips –
Boost your credit score
Improving your credit score is one of the fundamental things that you can do to enhance your interest rate. Moreover, it increases your chances of getting a loan in the first place. Even a little improvement can make a huge difference. Check your credit score from three major credit bureaus of the U.S. If you had a credit score of 659 and were able to improve it up to 680, you could save more than 0.60% off your interest rate. Wondering how to improve your credit score? Well, pull your credit report, and alert the credit bureau of any errors, pay your debts on time, don’t apply for any credit, etc. All these will help improve your credit score.
Save up a solid down payment
Another way to get a better mortgage rate is to come with a decent down payment. Though sometimes you can get away with a lower down payment, generally, you want to save at least 20% of the cost of your home as a down payment. The bigger the down payment, the less your lender has to loan you, and the smaller the risk you pose. And if you are a lower risk borrower, you will probably get lower interest rates as a result.
Keep your income steady
You want to establish yourself as a safe borrower before your lender, so keep your employment and income steady. Just don’t change jobs or quit yours too close to the time you are applying for a mortgage. Generally, lenders want to see that you are with the same employer for at least two years. If you can increase your income in the time leading up to your loan application, that is even better. Even a part-time job can be a big help for you.
Compare several lenders
The key to getting the best mortgage rate is to get quotes from diverse lenders. Rates can be very different from one lender to the next, so it is vital to compare at least a few before deciding who will originate your loan. Be sure to also know how much you can afford to pay per month. You can figure this out using an online mortgage payment.
These are some of the effective strategies that you can follow to get the best mortgage rate. So, abide by these strategies and ensure the best rate from your mortgage lender.