Buying a home can be nerve wracking, but it is also extremely rewarding. Obviously you want to get the best home loan rate that you possibly get. If you are ready to start your search for the best home loan rate we have outlined four tips that will ease your search. Keep reading to learn the four tips for getting the best rate on home loans.
Tip #1: Compare Rates
After you have found the home of your dreams chances are good that the real estate agent will direct you to certain lenders he is used to working with. Take that referral with a grain of salt. Your real estate agent just wants to close your deal quickly, but securing a mortgage is a complicated process. This is even or true if you are a first time buyer. Speed isn’t important, you need to shop around for the best deal you can find.
Whether you want to work with a local lender or you are considering working with a big-name company you want to look at rates online so you have a good comparison. Comparing the rates of several different lenders will help you find the best deal for you.
Tip #2: Polish your Credit Score
You want to keep your credit score in tip top shape. This is especially true if you want a conventional mortgage. The higher that your score is the better the interest rate you will get. Plus, you will have more loan choices if your credit score is good.
Tip #3: Increase Your Down Payment
It can be difficult to save up enough for a down payment, but paying more from the jump can help you nail down a better interest rate. It can also save you money as you pay down your loan. It can also save you the cost of mortgage insurance, which some lenders will require if you have a lower than normal down payment.
Tip #4: Decide How Long You Will Be in The House
If you know the home you are buying is starter home and you will only be in it for a few years you may want to consider an adjustable-rate mortgage. ARM loans typically have low initial interest rates. You can sell the home before the rate begins to reset. This will only work if you are not planning on being in the home you are buying long-term.