Glynn County Housing Market Update The Glynn County housing market includes Brunswick, Jekyll Island, Sea…
5 Tips to Lower Your Mortgage Interest Rate
Finding a lower mortgage rate can make a huge difference in your monthly payment and in how much interest you pay over time. Here are some tips on how to get the best rate when you get a mortgage:
1. Improve your credit score:
Your credit score plays a significant role in determining the interest rate you qualify for. Lenders generally offer better rates to borrowers with higher credit scores. To improve your score, make sure to pay your bills on time, reduce your credit card balances, and avoid opening new lines of credit unnecessarily. By demonstrating responsible financial behavior, you can enhance your creditworthiness and potentially secure a lower interest rate.
2. Explore Down Payment Options:
Different down-payments can result in different interest rates, and larger down-payments don’t always mean lower rates. Work with your lender to explore all of your options to find the “sweet-spot” for your interest rate.
3. Work With a Creative Lender:
Not all lenders are created equally. There are many different loan options, interest rate solutions, and mortgage insurance structures that can save you money and customize the payment and cash-to-close to fit your needs. By shopping around, you can identify lenders offering competitive rates and potentially negotiate better terms.
4. Consider a Shorter Loan Term:
Did you know you can get a 25 year mortgage and even a 10 year mortgage? Opting for a shorter loan term, such as a 15-year mortgage instead of a 30-year mortgage, can lead to lower interest rates. Lenders often offer reduced rates for shorter loan terms since they carry less risk. While a shorter term means higher monthly payments, it can save you a significant amount of money in interest payments over the life of the loan.
5. Pay for points:
Mortgage points, also known as discount points, allow you to prepay interest upfront in exchange for a lower interest rate. Each point typically costs 1% of the total loan amount and can lower your interest rate by a certain percentage (usually 0.25% per point). If you have the funds available, paying for points can be a worthwhile strategy to secure a lower interest rate and save money over the long term.