Rule the Rate Quote: 5 Tips For Getting a Better Rate
There are several factors that go into determining your interest rate. Some of these factors may be out of your control at the time of your application, but here’s what you can do to make sure you get the lowest rate:
Improve your credit score
Improving your credit score has a huge impact on your interest rate. Make sure you’re making timely payments on your credit cards and loans and put extra money towards paying off large debts. If you find inaccurate information on your credit report, work with the party who reported the issue to resolve it or or file a complaint with the CFPB.
Make a larger down payment
The higher your down payment is relative to the property value, the less risk a lender is taking on, the lower your interest rate will be. If you can put a little more down on your house, or make the same down payment on a less expensive house, you may be able to get a lower rate.
Modify the size of your loan
Mortgage rates tend to be lowest for loans between $150,000 and $417,000 (or $625,500 in pricier markets). Lenders will often increase rates for jumbo loans and may even raise interest rates for very small loans.
Have escrows or impounds
This is mortgage jargon for paying your property tax and homeowner’s insurance through your lender. You make monthly payments to them and they make your annual payments for you. Some lenders will offer a lower rate if you choose to do this.
You can always opt to pay “points” in return for a lower interest rate. Depending on how long you’re keeping your loan, this may or may not make financial sense for you.
As always, rates vary. To get the most accurate and up to date information get in touch with one of our mortgage advisors and start paving your path to homeownership today!