Use these tips to get the best possible rate on your mortgage.
When you first think about .5 percent, it seems like such a small number. After all, .5 percent of a pie would be barely a nibble! When it comes to your mortgage, though, these tiny changes can make a big difference. If you can improve your mortgage rate by .5 percent, you can likely save tens of thousands of dollars over the life of your mortgage.
So that you can get the best possible rate on your mortgage, here are a few tried-and-true tips.
- Improve Your Credit Score: This little three-digit number makes a world of difference in your mortgage application because lenders use it as an indicator of your financial responsibility. To boost your score, avoid opening new lines of credit, don’t close your old lines, be aggressive with your debt, and try to cut back on the amount of your credit you’re using to less than 20 percent.
- Reduce Your Debt-To-Income Ratio: If the majority of your income is going to paying off your existing debts, your lender will likely have some concerns about your ability to balance another debt in the mix. Get your debt to income ratio below 36 percent to get the best rates.
- Buy Points: Most lenders will let you pay more money upfront in order to get a lower interest rate. These “points” are 1 percent of the borrowed amount, and the more of them you buy, the more you can reduce your interest rate.
Want to have a California mortgage expert look at your unique situation and tell you the best things you can do to get a better rate? Contact Andraya Coulter in Pleasanton today! I have years of experience helping people make their dreams of homeownership as affordable as possible, and am here to help you!