Choosing a mortgage is just as important as buying a home.
There are ways to reduce your rate and save some money.
How can I reduce my mortgage loan interest rate?
- Compare all mortgage options
- Contact as many lenders as possible to compare rates. There are mortgage bankers, regional banks, national banks, and credit unions, which will all offer different rates and fees. There are free mortgage calculators that you can use to calculate potential savings. Check to see what your monthly payments will be before making a decision.
- Improve your credit score
- The higher your credit score, the better mortgage rate you’ll get. This means lower monthly payments.
- Make a larger mortgage payment
- If you pay a larger down payment, you’ll have more equity and pay less interest overall during your loan.
- Look into home-buying assistance programs
- The federal government has programs to help homebuyers. Some states have first-time homebuyer programs that help with down payment assistance.
- Be sure to verify it with the department of Housing and Urban Development (HUD). HUD helps people with lower credit scores to qualify for a mortgage with a low down payment.
- Lock your interest rate
- If you think your may change, lock in your rate. To lock your rate, you’ll have to pay a fee, but it could be worth it.