While many of us are fans of discounts and reward programs, we need to admit that the majority is strangely puzzled when it comes to mortgage deals. When buying a home, acquiring the best mortgage rate has been the most important factor.
As technology advances, looking for rates can be easy using a comparison website online. But still, it can be a complex business because many homebuyers didn’t realize that the rates offered can widely vary. A major report has revealed that hundreds of thousands of home loan borrowers are throwing away a billion dollars a year just because of signing up with the wrong deals. Maybe you’ve heard about a super low rate available, but do you actually know how to get your hands on them?
Don’t simply refer your rate shopping decisions from a typical friend or an agent’s reference because you are leaving a serious amount of money on the table. Here are some ways to seal the best mortgage rate possible.
1. Shop around and compare the best rates.
Huge savings in the home loan can happen with even a small difference in the rate or terms of a mortgage. If you’re offered the first one, don’t assume that it would be the best option for you. The lowest mortgage may not be the best. Be sure to review each and make sure that the charged rate provided is accurately determined.
2. Be informed. You can negotiate a better rate.
Doing your own research is the key advantage in landing a great mortgage rate. Some lenders might offer something that isn’t really ideal for your situation. So, having knowledge is better than just blindly following a loan officer’s decision. Diving into the mortgage market armed with information is your advantage to haggle for the best rate.
3. Tidy up your credit.
A highly qualified borrower is the one having a high credit score. Remember that a little number can be a very big deal and can indicate how you’ve managed your credit in the past appropriately. Here’s a tip: Don’t apply for a loan of any kind before or while buying a home. Before you begin mortgage shopping, you should build up your credit score by paying your bills on time, checking your credit report for inaccuracies and paying off any outstanding debts that you weren’t aware of. Doing all of these means getting a better rate.
4. Keep your income stable.
Put off the thoughts of new job hunting until you buy your home. Stable employment history is what most lenders like to see. Staying committed to your job for a long-term period would mean the same in paying off your mortgage.
5. Have an experienced mortgage professional as your guide.
There is no one-size-fits-all strategy in the mortgage process. That’s why working with an independent mortgage broker is key in finding the best type of home loan that’s right for your situation. According to a Bank of Canada report, homebuyers who use a mortgage broker pay the lowest rates.
6. Have a decent down payment ready.
The amount of money you are able to put down in a home is one of the factors where your mortgage rate would be based. Generally, lenders offer a better rate for borrowers making a big down payment because they pose the least risk. So, better start building up a fund by spending less and saving more. This strategy will not just give you ample savings for a home loan down payment but would also cover those fortuitous homeownership expenses.
Figuring out the best ways to secure a great mortgage rate can be tricky, especially with the mortgage market oversaturated with so many available options. It’s not an easy task to handle on your own. Follow the above steps to help you steer on the right path to securing a great mortgage rate.