Below are some quick and easy steps toward a great mortgage interest rate.
- Know your credit score. Whether you pay your bills on time is about 35% of your credit score and another 30% of your score is based on how much debt you owe.
- Decide on a realistic down payment. Saving even the smallest amount is critical for the best outcome and ask how your down payment will affect your loan package.
- A stable income or an increasing income. The final verification of employment could affect your loan’s amount if your income decreases.
- Consider an ARM or 15-year mortgage. Rates for these vary from a conventional 30-year loan. An Adjustable Rate Mortgage will have a lower starting payment but increase over time, sometimes very rapidly.
- First-time homebuyer programs. In Minnesota, there are options for first-time homebuyers, simply visit https://www.hocmn.org/. Many of these programs provide options for lower down payments, as low as 3%. These programs have options for previous homeowners as well.
- Paying points. This provides varied mortgage interest rates on loans with ‘points,’ based on 1% of the loan per point. For a $200,000 loan, 1 point would equal $2,000. Points can be used to pay closing costs.
- Compare lenders. It is typically in your best interest to obtain three offers from different lenders and then compare them.
If you are looking for a new home and want to get the best rates, feel free to contact us and we will be more than happy to assist you in every step.