Even though they’ve started rising, interest rates are still close to historic lows. But if you’re shopping for a new mortgage or renewal, there are ways to make your rate even lower. Here are some strategies to make sure you get the lowest possible rate:
- Get your credit in tip-top condition. The better your credit record, the higher your credit score. And the higher your credit score, the lower your interest rate! To maximize your credit score, make sure all bills are paid on time (especially mortgage payments). Don’t open or close new credit accounts for a few months before you apply (that can lower your score). Check your credit reports and correct any errors. Pay off as many debts as you can (especially large ones) since this will lower your debt-to-income ratio.
- Make sure it’s the right mortgage. A low rate is important. But a low rate on the wrong mortgage can end up costing you more. Make sure you’re getting the loan that works best for your situation and plans, whether it’s variable, fixed, open, closed, short or long term. Depending on your plans, you may benefit from a transferable mortgage, low pre-payment penalties, or flexibility to increase payments.
- Shop around. Don’t settle for what your current bank or lender is offering: it’s rarely the best deal. Check the rates and features of all major lenders, small regional lenders, online lenders, and lenders that specialize in your financial circumstances.
- Work with a mortgage expert. With rates changing rapidly and other economic factors at play, you need a professional who’s constantly monitoring rate and mortgage markets. Only then will you know when to apply, which term to choose and which options to look for. As your local mortgage experts, we can sit down with you, analyze your financial situation, recommend strategies to improve your credit score and help you find the best possible loan and rate. For more info, call us today!