Qualifying for a home loan is easy—but getting a rate you’re satisfied with is a whole other matter. Buying a residential property as soon as possible may incite you to get any mortgage you can qualify for, but stop right there! No matter how excited you may be, you must always take your time in choosing a loan with reasonable rates to save you from future headaches and financial problems.
Getting the Best Mortgage Rate
When shopping for a home loan, the mortgage rate should be one of the primary things you must pay attention to. No one wants to pay for more if other options allow you to commit to much less! Having a great mortgage rate will save you a serious amount of money in the long run.
If you want to get the best mortgage rate, just follow our tips below:
1. Start With a Home Mortgage Calculator
The home mortgage calculator helps you estimate your monthly mortgage payments based on the value of the property you want to buy, given your income. Such calculations will help you determine how much you can spend on a residential mortgage, so you can narrow down your house options and find the right mortgage with great rates!
2. Choose Between Fixed-Rate or ARM
A fixed-rate mortgage refers to a home loan that has a fixed interest rate. Whatever happens in the future, whether good or bad, your monthly mortgage payments will remain the same for the entire term of the loan. Other costs may fluctuate, such as insurance and property taxes—but your interest rate will never change.
On the other hand, the interest rates of an adjustable-rate mortgage (ARM) change over time. An ARM usually offers lower introductory rates lasting ten, seven, or three years where your interest rate remains fixed—but after that, it will fluctuate. Your ARM rate can cause your mortgage payments to go up substantially after the introductory period, so be wary of the risks!
3. Improve Your Credit Score
Your credit score is one of the primary measures of your financial health and has a significant impact on whether or not you can get the best mortgage rate. The best home loans are only available to borrowers with high credit scores.
If you want to qualify for a great mortgage, you need to work on your credit score. You can improve your credit score by building your credit file, paying your loans on time, getting a handle on bill payments, and paying for outstanding debt.
4. Put Down a Bigger Down Payment
It’s possible to get a mortgage with a 5% down payment, but you probably won’t get the best mortgage rates with that amount. Saving for a bigger mortgage down payment will allow you to have cheaper monthly repayments and be offered better mortgage deals with lower interest rates.
If you’re not in a rush to purchase a house, you should take some time saving up for a bigger down payment.
Your house will be one of the biggest financial investments you will ever have, so you must take the proper steps for happy homeownership in the future. If you don’t want to feel burdened with monthly repayments, make sure to follow our guide to get the best mortgage rates and work with a mortgage broker that can help you explore the available options in the market.
Are you having a challenging time looking for the best mortgage rates in Washington? PaloRate can help you get the home loan you want! As a mortgage broker firm, we handle all your mortgage needs in-house for a streamlined application and approval process and faster closing. View live mortgage rates in your area today!