How to Get a Lower Interest Rate on Your Home Loan
March 22, 2021
Are you looking for a lower interest rate on your home loan? First-time borrowers and experienced house hunters alike do well to focus on what they can do to get a more competitive interest rate.
You are not required to simply accept whatever rate your current lender might be offering and some borrowers do not realize that lower rates may be within their reach if they take the right steps.
How to Get a Lower Interest Rate on Your FHA Mortgage: Credit Scores
If you have not looked at your credit report, if you do not know the contents of your credit report, you are not only NOT ready to apply for a home loan, but you could be cheating yourself out of better interest rates by finding out what needs to be done for you to work on your credit scores.
Some borrowers do not realize that the interest rate offered to them is influenced in part by the credit scores they have at application time. If you start working on your credit by paying on time every time for at least 12 months and avoiding new credit, you are well on the way toward raising your credit scores which can earn you better rates.
Get a Better Interest Rate on Your FHA Loan: Improve Debt Ratios
If you carry too much debt compared to your current income, your lender may charge you a higher interest rate. Cut your current monthly debt as much as you can before applying for a home loan. Do this in conjunction with the advice given above for best results.
Get a Lower Mortgage Rate: Apply For A Shorter Loan Term
Borrowers who need a lower rate but who can afford to pay more each month on their mortgages should consider applying for a shorter loan term. Interest rates on 15-year fixed-rate home loans are lower than for 30-year fixed rate mortgages.
A Better Interest Rate Is Possible by Shopping Around for a Home Loan Servicer
Not all financial institutions offer the same interest rates and you do well to shop around for a new lender if you feel your current lender or those you’ve reviewed up to now offer rates that are too high. You do NOT have to use your current bank to apply for a home loan.
Lower Your Interest Rate by Purchasing Discount Points
Borrowers who don’t mind paying more up front for discount points can lower the interest rate on their home loan by doing so. Ask your lender how buying down your interest rate can affect the up-front cost of the mortgage and ask to have that compared to the amount of savings you’ll get over time if you purchase the discount points.
You’ll be glad you did even if you choose not to buy discount points after all. An informed purchase is a smart purchase.
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RELATED VIDEOS:
Don't Skip the Home Inspection
Bigger is Better With a Jumbo Loan
Insuring Mortgages With the FHA Funding Fee
You are not required to simply accept whatever rate your current lender might be offering and some borrowers do not realize that lower rates may be within their reach if they take the right steps.
How to Get a Lower Interest Rate on Your FHA Mortgage: Credit Scores
If you have not looked at your credit report, if you do not know the contents of your credit report, you are not only NOT ready to apply for a home loan, but you could be cheating yourself out of better interest rates by finding out what needs to be done for you to work on your credit scores.
Some borrowers do not realize that the interest rate offered to them is influenced in part by the credit scores they have at application time. If you start working on your credit by paying on time every time for at least 12 months and avoiding new credit, you are well on the way toward raising your credit scores which can earn you better rates.
Get a Better Interest Rate on Your FHA Loan: Improve Debt Ratios
If you carry too much debt compared to your current income, your lender may charge you a higher interest rate. Cut your current monthly debt as much as you can before applying for a home loan. Do this in conjunction with the advice given above for best results.
Get a Lower Mortgage Rate: Apply For A Shorter Loan Term
Borrowers who need a lower rate but who can afford to pay more each month on their mortgages should consider applying for a shorter loan term. Interest rates on 15-year fixed-rate home loans are lower than for 30-year fixed rate mortgages.
A Better Interest Rate Is Possible by Shopping Around for a Home Loan Servicer
Not all financial institutions offer the same interest rates and you do well to shop around for a new lender if you feel your current lender or those you’ve reviewed up to now offer rates that are too high. You do NOT have to use your current bank to apply for a home loan.
Lower Your Interest Rate by Purchasing Discount Points
Borrowers who don’t mind paying more up front for discount points can lower the interest rate on their home loan by doing so. Ask your lender how buying down your interest rate can affect the up-front cost of the mortgage and ask to have that compared to the amount of savings you’ll get over time if you purchase the discount points.
You’ll be glad you did even if you choose not to buy discount points after all. An informed purchase is a smart purchase.
------------------------------
RELATED VIDEOS:
Don't Skip the Home Inspection
Bigger is Better With a Jumbo Loan
Insuring Mortgages With the FHA Funding Fee
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