How To Get A Below Market Mortgage Rate

How To Get A Below Market Mortgage Rate

Unfortunately too many people go about purchasing a home in a fashion that locks them into a higher mortgage rate than necessary. Below are the five things you need to think about now to insure you get a below market fixed rate when you purchase your home. Some are common sense, others take planning and effort but when you consider that a 0.25% rate drop over the life of the loan can save you thousands of dollars, it is worth the effort.

• At least 6 months before purchasing a home, run your credit with all three repositories. (Some Mortgage Brokers will do this for you free of charge). If two of your three credit scores are not above 740, you will receive a somewhat higher rate than the very best available rates. If you wish to increase your credit scores, some brokers have the expertise to discuss your options. Do not do this by yourself or with the help of someone who is not a professional as you could make your credit scores worse.

• Use a Mortgage Broker you know and trust! Mortgage Brokers can typically save you up to a 0.25% in your mortgage interest rate as they shop not only the large institutions you know about but many of the smaller local banks and mortgage companies you will never hear about. Lenders large and small prefer to originate loans through their “Mortgage Broker Channels” because it is the cheapest most efficient way for them to originate loans. They save on overhead cost such as employee benefits, staff, office space and supplies and pass that savings on to you through “wholesale mortgage pricing”

• Allow the lender to “escrow your taxes and insurance”. Many people refuse to let the lender collect their taxes and insurance on a monthly basis thinking that they should be in control of their money until the taxes and insurance are due.

• Discuss the type of property you are going to purchase with your Mortgage Broker as some property types have price additions to your mortgage rate to compensate the lender for the risk.

• If possible have the seller pay points to help you “buydown” your interest rate. On a purchase, even the points paid by the seller at close are tax deductable in the year you purchase your home and the lower interest rates save you thousands over the life of your loan.

A qualified and reputable Mortgage Broker can not only help you secure the lowest rate possible, but can also help you through the application process.

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