Deciding to purchase a home is just the first step in the somewhat lengthy process of becoming a homeowner. The next step will be to figure out how much monthly mortgage rates will be and if you can actually afford them. Saving money is a desired goal of most hard-working individuals, especially those that are trying to purchase their first home. There are at least four steps that can be taken to get the best rates for your home loan, which can provide even bigger savings down the road.
Step One:
Checking multiple financial institutions is the best way to start. There are always offers made by the bank you have a checking or savings account with, but this doesn't mean that you have to take the offer. Plenty of other mortgage companies have deals on rates and with a lot lower interest rates as well. Getting estimates from a few different places is an easy way to make a comparison between them all. Be sure to take note as to the amounts listed for fees and interest rates for each estimate.
Step Two:
Paying bills on time will keep mortgage payments lower, since this will show that you are reliable and not going to be a high risk. Financial institutions that are providing loans want to make sure that you are going to be able to make your payments and that they will be on time as well. They don't want to award loans to people who are going to end up defaulting on them. This will look bad on the institution, lowering their credibility with others since it will seem they give loans to anyone.
Step Three:
Double check your credit report for any mistakes. For instance, there might be a loan listed on your credit report that you actually paid off three years prior to this report. It's a good idea to check the statement completely, there is always a chance that something might be wrong on it. If you assume that it is fine, it can be very disappointing down the road if your loan is denied because of some minor discrepancy on the credit report that could have been fixed.
Step Four:
Keep track of credit cards and how much credit is available on them. Having five or six credit cards doesn't usually look very good on a loan application. It looks even worse if all of these credit cards are completely maxed out or close to reaching their limit. To the mortgage lending company, this looks like you don't know how to handle money so you have to charge everything. Try to pay off and get rid of excessive numbers of credit cards.
While there may be additional steps that can be taken to get lower mortgage rates, these four are some of the biggest steps that can be taken. These will drastically lower mortgage payments and save tons of money through the years. Checking with the financial institutions that you are seeking loans with is another way to see what they offer by way of lowering mortgage payments. Sometimes they will have a deal that will offer lower monthly payments for a limited amount of time. |
