- 1). Keep a low debt-to-income ratio. The less you owe on credit cards, the better your chances of getting a reduced interest rate on your mortgage loan. Pay off credit cards or reduce your balances before applying for a home loan or mortgage refinance.
- 2). Stay employed, preferably with the same employer. Employment gaps look bad on a mortgage loan application, and a lender may charge a higher mortgage rate due to lack of steady employment. Maintain consistent employment for 24 months, ideally with the same company.
- 3). Increase your down payment on the purchase. If buying a new property, aim for a 20 percent down payment to help you negotiate a reduced mortgage interest rate and save money on the house payment.
- 4). Ask about discount points to save on interest. For every discount point you buy, you will likely save 0.25 percent on your home loan interest. Every mortgage discount point bought will cost 1 percent of the loan balance. You pay this upfront fee at your closing.
- 5). Research other mortgage lenders. Get mortgage loan quotes from two or three lenders to compare mortgage rates. These are no-obligation quotes. Comparing prices and mortgage terms is key to getting the best mortgage loan and rate.
- 6). Raise your credit score to 740 or higher. Keep paying your other debts on time and maintain as little consumer debt as possible to improve your score and qualify for the best mortgage rate. According to Bankrate, a score of 740 or higher helps you acquire the most desirable mortgage interest rate.
previous post
next post