Mortgage Management: How Smart Homeowners Secure the Best Terms
Purchasing a home will most likely be one of the biggest financial commitments you ever make, and that is why you must carefully consider all of your options before signing your loan papers. Mortgage companies take a look at dozens of different factors when determining loan rates, and fully understanding those factors could end up saving you tens of thousands of dollars over the years. Here are a few tips and tricks that you can use to secure the best rates on your home loan.
Monitor Your Credit Score
Your credit score is incredibly important when applying for a loan, and you need to start tracking it well before you speak with a mortgage company. Some of the factors that the leading credit agencies use to determine your score include your payment history, outstanding debt, length of credit history, new credit, and types of credit. Making your payments on time and paying off high-interest debts could boost your score by quite a few points.
Build a Solid Down Payment
Some lenders might approve your loan even if you don’t have a sizeable down payment, but you should still try to save up as much as you can. With a larger down payment, the lender will be able to offer you better interest rates and more payment options. You can also use the down payment as a bargaining chip when it comes time to negotiate your terms with the loan officer.
Work with a Mortgage Broker
This process is extremely complex, and most buyers are going to benefit from working with a mortgage broker. Your mortgage broker will essentially be a middleman between you and your lender. They communicate with both parties separately, and that means you won’t have to worry about scheduling multiple meetings with a loan officer. Their primary job is to quickly secure the best terms with a reputable lender.
Search for Assistance Programs
There are literally hundreds of assistance programs available to buyers from all walks of life. In addition to checking with your state’s housing association, you should also speak with your employer. These programs could cover expenses such as your closing costs or down payment. Some states offer tax credits and deductions to first-time buyers as well which could help boost their income tax refund depending on the circumstances.
Rachelle Wilber is a freelance writer living in the San Diego, California area. She graduated from San Diego State University with her Bachelor’s Degree in Journalism and Media Studies. She tries to find an interest in all topics and themes, which prompts her writing. When she isn’t on her porch writing in the sun, you can find her shopping, at the beach, or at the gym. Rachelle recommends a mortgage broker for those interested in finding a mortgage loan. Follow her on Twitter and Facebook