Buying a home is one of the most significant purchases that people make in their lives. As the value of even a median home in the United States is near $231,000 and most people don’t have that much liquid cash, a mortgage loan – in which one can borrow money from a lender – is the decisive savior to them. With this, one can continue the home-buying process and fulfill his or her long-cherished dream.
The terms of your mortgage loan matter greatly as the interest rate along with the type of mortgage and length of time you have to repay can impact the total amount that you have to spend. Lowering your mortgage rate by a percentage point or two can help you thousands of dollars in interest over the course of the loan.
But how to get the best mortgage rates Houston? Follow these tricks.
- Perk up your FICO credit score
Your three-digit credit score plays an important role in deciding whether you will get a low credit score or a high one. A mortgage lender will use the score as a benchmark in deciding your ability to settle up the debt. The better the score, the higher the likelihood, that the lender will be confident about your ability. To enhance your score, pay your bills on time and eliminate or pay down those credit card balances. Besides, check your credit score on a regular basis and look for any mistakes. If you find any errors, work to clean them up before you apply for a home loan program.
- Save for a good down payment
Saving more money and putting down it for a down payment can help you obtain a lower mortgage rate, especially if you have the cash to fund a 20 percent down payment. Of course, lenders accept lower down payments, but less than 20 percent usually means you will have to pay a higher mortgage rate. The sooner you can pay down your mortgage to less than 80 percent of the total value of your home, the earlier you can get rid of mortgage insurance, and thus, lowering your monthly bill.
- Shop among several lenders
When looking for the best mortgage rate, even for refinancing, do the necessary research for ensuring you are getting the right fit for your situation. In place of blindly believing the lender, you first come in touch with, talk to several lenders and explore the options online. The more you compare the better you understand who is offering the best mortgage rate. Check the options for your loan before making the final purchase.
- Lock in your rate
Sometimes the closing process takes weeks or even months, a period in which rates can easily fluctuate. Once you sign the home purchase agreement and have secured your home loan, ask your lender to lock in your rate. You may need to pay a fee to get the service; however, it may pay for itself in case rates rise.
Most of the things that can help you to get a lower mortgage rate are mentioned above. Follow these and ensure the best mortgage rate for your home loan program.
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.