5 ways to get the best mortgage deal
Buying a house usually means going through the process of finding a mortgage. While it’s easy to find a mortgage, it can be a lot more complicated to make sure that you’re getting the best deal. In addition to a low interest rate, a good mortgage should also have low closing costs and great customer service. In order to find a good mortgage, follow these tips.
- Get your credit score as high as possible. Start by getting copies of your credit reports and look for errors. Work on correcting any bad information, then work on mistakes. While it isn’t always possible to get notations of bad incidents removed, it’s worth it to try. If you can’t fix anything, consider waiting a few months for bad information to fall off of your report.
- Be honest on your loan applications. In today’s market, everything is going to be checked, so it doesn’t make sense to lie about your credit score or leave off assets and loans. If you need to use income from a bonus or second job in order to qualify for the loan, be prepared to show proof.
- Make as big of a down payment as you can. The more of your money that you’re willing to invest, the less risky the loan is for the bank. That means a lower interest rate if you can come to the table with a large down payment. Try to save at least twenty percent of the value of the home before mortgage shopping. Of course, make sure that you can still afford your moving costs and the closing costs on the mortgage.
- Don’t just look at the interest rate. While the interest rate can be important, its also critical to consider the fees and other charges that come along with the mortgage. Closing costs and other fees can add up to a lot more than the monthly interest charges.
- Know how much your home is worth. This is critical if you’re doing a refinance, but it is also important for first time home buyers to know what the asset they’re buying is worth. Homes that are mortgaged for more than their appraised value tend to have mortgages with higher interest rates. If you know what your home is worth, however, you’ll be in a better position to negotiate a lower rate.