Whether it’s always been a life goal of yours, or your family has just outgrown apartment living, home buying is a huge step. In many cases, it’s less expensive than renting! A considerable way to make sure that’s the case for you is to keep an eye on your mortgage.
A low-interest rate means a low payment, which makes that house an even better option.
Below are a handful of ways to get the lowest interest rate possible on your mortgage- and make the dream of buying a house come true!
Raise Your Credit Score
I understand this is easier said than done, but if you raise your credit score, then your interest rate will go down. If your credit score is in the low 600s, you can raise it by a hundred points in just a year by using these tactics.
A higher score means a low interest rate, which in turn means you’ll save a lot of money.
Shorten Your Loan
It’s intuitive that if you pay off your loan faster, you’ll have to pay less in interest. Shorter loans don’t lower your rate themself, but it does endure that you’ll save yourself a lot of money in the long term. This plan also works if you just want the home for a shorter period, to resell since the cost of selling a house is already high enough without interest rates kicking in.
In this modern age, some people find it difficult, or uncomfortable, to bargain with their bank. Many can be changed or negotiated down if you seriously talk to your bank about it. Think about it like buying your first car, nobody wants to pay sticker price, and that should go with interest rates as well. Make it clear what you can afford, and more often than not, they’ll work with you on it.
After all, banks want you to be able to pay off your loan.
Make a Larger Down Payment
This idea can be challenging if you don’t have a lot of money upfront, but if you can afford a larger down payment, this will help you in the long term. The less money you owe, the lower your interest rate, not to mention that this method runs in the same line as shortening your loan. You’ll owe money for a shorter time, which will save you in the long run.
Have Good Work History
Your work history isn’t something that you can change around, but it is something that you should consider heavily. Banks want to see that you’re reliable, that they know what to expect from you. Show them, with your work history, that you take this seriously- and that this is a place you’re going to stay for years to come.
It’s essential to be thorough with paperwork, especially contracts when such a large amount of money is involved. Pay attention to what you’re signing off on, and you’ll be able to make your home just that much more affordable.