Finding the best mortgage rate is one of the most important things that any first-time home buyer can do in order to save money. Rates can vary dramatically, and going with the first option that is offered is not a good idea. More often than not, getting the best possible mortgage rate is a time-consuming process of trial and error, and it doesn’t happen overnight. There are plenty of things that you can do, though, to find a rate that will not only make it easier for you to afford a mortgage, but will be better than any other offered in your state.
Clean up your credit
If there’s one thing that you should do before you even consider looking for a mortgage, it’s to clean up your credit. This is very important, because no lender is going to give a great mortgage rate to someone whose credit is full of below par. For those who don’t have the credit financial history, it can take a long time to recover. This is especially true for anyone who has done bankruptcy, which can hold you back from getting a mortgage for years. Still, there’s no better time than now to start working with a credit specialist if you’re interested in getting a mortgage. There are many agencies that provide free credit counseling, which is ideal for those who are sticking to a tight budget and can’t afford to hire anyone. The sooner you get started, the sooner you’ll be able to find a great rate.
Shop Around Financial Institutions
Once your credit is in good shape, then it is time to shop as many financial institutions as you can. All lenders are different, and the rates you end up getting from one lender could be very much different from those associated with another institution. Shopping different lenders will allow you to come up with a good idea of how much rates can differ, and is a great way to better inform your decision. It’s also a lot of work, though, so be sure you give yourself the time to look around. If you’re in a hurry, you’ll most likely end up getting a rate far higher than you’d be able to find with the right amount of lead time.
When dealing with a lender and filling out a loan application, it’s important that you remain as open as possible. Trying to hide certain flaws isn’t going to help you, and the lender will be far more likely to offer you a good mortgage rate if you’re honest and up-front from the very beginning. You don’t need to provide information that might not end up getting utilized, but you should never try to hide anything, despite the outcome. In most cases, this type of approach ends up causing more harm than good.
Offer a large down payment
Sometimes, the best way to ensure that you’re getting a low mortgage rate is to offer a large down payment on the home. Many people who are on a tight budget find this difficult, but if you can save enough money for a large down payment, you’ll be in a much better place to negotiate. After all, you’re trying to appeal to lenders as much as possible, and the best way to do so is by putting as much money on the table without jeopardizing your financial situation. If possible, try to collect contributions from friends and family members. So long as you’re good with paying people back, doing so can be a major help in getting you the best rate possible.
Lang Premier Properties are Birmingham Realtors specializing in Oakland County Real Estate. Stephanie is an agent with Max Broock in Birmingham, Michigan. See what past clients have to say about Stephanie Lang. Lang Premier Properties looks out for your best interests when you purchase a new custom luxury home. We always recommend working with an experienced luxury real estate agent when buying a new luxury estate.