6 Smart Tips To Get The Best Mortgage

Home mortgages can stick around for as long as 30 years. Don’t regret the mortgage you got yourself into because of lack of research. Here are six smart moves you can do before getting a mortgage. These steps just might save you thousands of dollars.

1. Scrutinize Your Credit Report

It’s common knowledge that a good credit score can lead to lower mortgage rates. So before applying for a loan, make sure your credit score is accurate. You can do this by scrutinizing credit reports from the three major credit-reporting bureaus and check the information that they have recorded. It is possible that some discrepancies could be present that can affect your credit score. Checking and verifying just might get you that lower rate.

2. Look for the best mortgage rate

Aside from getting your credit score ready, a big chunk of getting a good mortgage is from the rate that the lending institution can give. There are thousands of lenders and banks that can give you a loan, don’t be shy to look for the best rates. Start by checking online reports of the best mortgage rates available in your state.

3. Get Pre-approved

Getting yourself preapproved from your lending institution of choice can give you a clear idea of just how much you can borrow. The institution will evaluate your information and they will give you how much they can give you. Plus, getting preapproved can establish your credibility with sellers and real estate agents who will look at how you can get financing.

4. Find out how much you can afford

Most people can get drawn by beautiful houses they just cant afford. Be realistic when shopping for homes and be aware of external factors such as association fees and maintenance costs. This could greatly affect your monthly budget and there’s no way to cut down on these costs once you’ve got yourself into it.

5. Decide if buying down the interest rate is practical

One way to get the interest rate down is by paying discount points on the mortgage. What happens here is that you pay money up front in exchange for a lower interest rate for the rest of the loan term.

One point equals 1% of your loan. If you’re borrowing $200,000, then a point would cost you $2,000. Each point can take off one-eighth to one-quarter of a percentage point off your rate.

Buying down the rate is only useful if you plan to stay in that home for the long term. Also this is feasible if you do have the extra cash at hand.

6. Strike a deal with Sellers

Another way to bring down your interest rate is by negotiating with sellers to let them pay the points. Paying points can cost less for sellers than reducing the price of their home. This can be an effective way to solve negotiations on pricing. It’s both advantageous to the buyer and the seller as well.

Doing a little extra work can mean major savings. And for something as big as getting a home loan, taking that added measure should be well worth your time.

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