Buying a home is an exciting and momentous life event, and one that also comes with a large price tag. Fortunately, there are a number of ways to keep your interest rate and total costs to a minimum. We’ve compiled five smart tips to help you find the best mortgage rate to help make your home-buying process even smoother.
Do Your Research
It sounds simple enough, but you’ll need to do some research. Looking into the rates that online banks are offering and talking to mortgage lenders in person will give you a good idea of the kinds of rates that are available so that you can smartly shop around. Proving that you’re knowledgeable about the competitive rates available may enable you to negotiate an even lower rate.
Polish Your Credit Score
People with credit scores of 740 or higher are typically offered the best mortgage rates. While it’s possible to get a mortgage and buy a house with a lower than average FICO score, you may not get the best mortgage rate on your ideal condo, townhome or home for sale in Irvine. Increasing your credit score by paying previously unpaid balances, getting a thorough credit report to make sure your score is accurate and avoiding any other large purchases can all help to keep your credit score high.
Pay a Large Down Payment
If you can afford it, paying a larger down payment on your house can help you secure a lower interest rate. By paying a higher down payment, your mortgage amount will be lower which means lower costs for you each month. The less money your mortgage lender has to loan you, the less you’ll have to pay back over time.
Lock In Your Rate
Once you’ve found a rate you’re comfortable with and you’re ready to buy, it’s important to lock in that rate as soon as you can. If you’re happy with the rate you and your mortgage loan officer have been discussing, sign an agreement with them that will allow you to keep that rate for anywhere from 30-60 days, depending on the mortgage. This gives you time to finalize the closing process, and the rate will stay the same throughout the lifetime of your mortgage, helping you avoid unexpected costs later on.
Look at Total Costs
It’s important to keep the total cost of the mortgage in mind before you sign an agreement, as there could be additional lending fees or other costs associated with your mortgage that would ultimately increase your monthly expenditure. Credit reports, application fees, mortgage insurance, notary fees and closing costs all add up quickly, and can potentially make the total price of your Irvine condo, home or townhome higher than you thought.