I spent my 20s mismanaging my money, and came to regret all of those impulse purchases placed on credit cards when my credit score plummeted due to missing a few payments. I didn't learn how much this would affect my life until I was denied for both an auto loan and mortgage in the same year due to my bad credit score. I spent the next few years cleaning up my credit report and putting every extra penny I had toward old debts. Having to put my impulse spending on halt was difficult at first, but it was a great learning experience and I now realize how rewarding saving and investing money really can be. I have put a lot of research into good money management techniques, so I decided to start a blog to share what I have learned with anyone who needs help!
When you buy a house and need a mortgage to do so, you may want to take the time to follow these four steps, as they will help you get a lower rate on your mortgage. A lower rate will result in lower monthly payments and paying less overall for the loan, and here are the best ways to do this.
Work on Your Credit
Did you realize that one of the main factors that will affect your mortgage rate is your credit? Your credit score is something your lender will look up before approving a loan for you and before offering you a certain interest rate. The interest rate you qualify for will be much lower if your credit is high. If your credit is not very good at this time, find ways to improve it, such as paying off debts you owe or disputing inaccurate postings.
Go Through a Mortgage Broker
Once your credit is in good condition, contact a mortgage broker. Mortgage brokers work with many lenders, and they are experts at finding the best loans for anyone who needs one. With a mortgage broker, you will find out all the options you have for loans, and the broker will aim to find the best rate possible for you.
Choose a Shorter-Term Loan
Another thing you could consider is choosing a shorter-term loan. Most people choose 30-year loans; however, did you know that you might qualify for a lower rate if you choose a loan that is only for 15 or 20 years? Choosing a shorter loan will cause your payments to increase, but you will pay off the loan faster and will pay less in interest for the entire loan duration.
Buy Points
One other thing you might want to evaluate is buying points with your loan. A point is something you can purchase as a way of getting a lower interest rate. To buy a point, you will have to pay cash up front, but it will cause your interest rate to decrease. You can buy just one point or several, and you may want to evaluate how this would affect your financial situation and your mortgage payments before going through with it.
Getting a low mortgage rate is easier to do if you follow these four tips. If you have questions or would like to apply for a mortgage, contact a lender today to find out if you qualify for a loan.
Share4 October 2018
