Your mortgage is likely to be the largest loan you ever get. As a result, it’s also likely to be quite expensive, due to the interest rate you pay. A large loan, over a long period of time, is expensive. In order to save as much as you can, it makes sense to get the best possible interest rate, and do what you can to save on other costs.
Here’s how to get a better deal on your mortgage:
Keep a good credit score
As always, the best way to get a better rate on any loan is to have good credit. A good credit score can go a long way toward ensuring that you see the best possible loan rate. Take actions that will improve your credit score, such as paying on time, reducing debt, and keeping a good history. Sign up for a theimk.com account to get your free credit report and score.
There are a number of sites, like Quizzle, that can help you find a good loan rate. You can search online to find the best deals, and see what you might qualify for. Use a loan calculator to get an idea of what you might have to pay, so that you have information to provide to others.
Work with a broker
A mortgage broker can help you figure out what loan programs you qualify for. There are a number of programs available, and a knowledgeable broker can ensure that you have access to different loans from a variety of lenders, as well as working through programs like local programs for first-time homebuyers and federal housing programs.
Make a bigger down payment
Save up for a bigger down payment, and you might be able to get access to lower rates. If you make a down payment of 20%, you will be able to avoid paying mortgage insurance. That can save you money over time. On top of that, you might be in a better position to negotiate a lower mortgage rate if you have a bigger down payment.
Consider paying points
If you are willing to pay a little more up front, you might save over time. Consider paying points, which are specifically designed to reduce your mortgage rate. If you will be in your home for a long period of time, paying points can make sense, since the lower rate will benefit you over time.
Ask about special deals
You can negotiate almost anything having to do with your mortgage costs. This can be a big deal, since you might be able to save on such items as closing costs. In some cases, you can get certain costs waived when you ask for special deals. Comparison shop, and let lenders know you are doing so, and it will provide them with an incentive to give you a break.