When purchasing a home, keeping an eye on mortgage rates is essential in finding a rate that works for you and your budget. Mortgage rates are the rate of interest on a mortgage that you will have to pay over the life of said loan so finding the best rates can help you save.
Keep these 4 tips in mind when searching for the best rates:
Don’t Settle & Do Your Research
When searching for the best rates, don’t settle for the first one you come across. Visit multiple lenders throughout your journey and compare them all. Each individual lender will structure their loans differently and therefore have their own individual rates.
Make sure to get Good Faith Estimates (GFE) from each and every lender you visit to not only gain negotiating power but check for junk fees.
Don’t Be Afraid To Negotiate
With your Good Faith Estimates in hand, go to a lender and don’t be afraid to negotiate. When you provide a lender with the Good Faith Estimate of a competitor, see if they will be able to match the rate. Remember that after points, fees, and closing costs are added up, the lowest upfront mortgage rate might not be the cheapest.
Lock-In Your Rate
Mortgage rates change each day. What was available yesterday may not be available today. If possible, lock in your mortgage rate when you find one you are comfortable with. Locking in your rate allows you to continue searching for a better one for a set amount of time without fear of losing the previous rate.
This especially important since the mortgage application process can be time-consuming. The rate available when you applied may not be available when the loan is approved. Before locking in a rate, check to see if the lender charges a lock deposit.
Improve Your Credit Score
It should go without saying that a good credit score is needed to get a mortgage rate that works for you. Your credit score is critical in the home-buying process because it is a concrete, numerical expression of your ability to pay back what you have borrowed.
Credit scores can be improved by paying off debts like student and car loans and getting a secured credit card.