5 Ways to Get a Better Mortgage Rate

blog2Mortgages are the largest monthly expense most homeowners will ever have. Getting the best mortgage interest rate starts with basics. Here are five ways to get the best rate possible.

  1. Check your credit. Before you shop for a home, review your credit reports. Correct any negatives you find, pay bills on time, and don’t open any new accounts. A change in your debt-to-income ratio can cause you to pay more in interest.
  2. Choose the right loan. Choose your loan based on current market conditions and how long you plan to stay in your home. The longer you plan to stay in your home, the better off you’ll be with a fixed-rate mortgage. It takes most borrowers five years just to earn back their original closing costs in equity.
  3. Compare rates and lenders. A loan officer can offer certain loan packages. A mortgage broker can shop your deal around to lenders for you. Remember, rates can change several times a day, so compare loan packages at the same time to get the best deal.
  4. Consider terms. The true cost of the loan is the APR or annual percentage rate, which includes fees from the lender. All terms are negotiable, so don’t be afraid to ask what a particular fee is for and if it can be reduced or eliminated. Also, the costs for a 10, 20 or 30-year loan will vary. Shorter terms mean larger monthly payments, but faster equity.
  5. Don’t wait for rates to go down. Rates are currently below four percent and likely to go up instead of down. Instead of worrying about rates, work on how quickly you can build equity quickly. Pay $25, $100, or $500 extra per month and you’ll more than offset any rate you’ll pay.

For more information, contact us today.

For more home tips, follow us on Facebook. Looking for a new home in the Kansas City area? Visit us at BHHSKCRealty.com!

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