4 Tips to Obtaining a Lower Mortgage Rate
Buying a home on mortgage is not a walk in the park. This is because you might end up paying more than what you bargained for due changing interest rates. On the other hand, mortgage still remains the only option of owning a home for most people. Since first time homeowners are an informed lot, they are not aware about the hidden charges that come with a mortgage.
What seemed like an affordable rate in the first year may escalate in the following years, giving you a run for your money. But you can protect yourself from such a problem by opting for a home loan that has the lowest interest rate. When the interest rate is at a minimum, you will be spending little money to service the loan. Here are some tips on how to secure a low interest mortgage.
Get Expert Advice from a Mortgage Broker
A mortgage broker should be your first stop shop when you are looking for an affordable home loan. Mortgage brokers are very knowledgeable on real estate issues. This is because they are always in touch with real estate developers. And since they earn commissions according to the sales they have closed, they can give you the best expert guidance. The best place to start when seeking such advice is Altrua Financial. They actually have a wide pool of mortgages for you to select from. Being guided by a mortgage broker helps you spend less time on finding the best deal.
Work on Your Credit History
You can increase your chances of getting a home loan at a lower rate by clearing your debts. Unpaid debts can get listed by credit agencies and it will cause you to miss out on so many investment opportunities. In fact, when you make a habit of settling your debts on time, you will have a high credit score that can give you an edge when shopping for mortgage. As a matter of fact, any time you want to get a loan from a bank or any other financial institution, they will first check whether you have a bad credit record before they approve your mortgage. A bad credit score can therefore stand between you and your dream home.
Avoid Changing Jobs
When looking for home loan, you have to forget about pursuing greener pastures elsewhere. Switching between different employers might imply that you don’t have a consistent working history. This might cause money lenders to be a little uneasy because they don’t see any kind of security in case you lose your job.
Even if you convince them to give you the loan, they will make sure that the interest rate is high so they can recover their money faster before you become jobless again. It’s therefore advisable that you remain with your current employer for the long haul. This will be regarded as a form of security by the lenders.
Exceed Your Down Payment
A desperate situation calls for desperate solutions. In fact, every little bit of effort matters a lot when you want a low interest rate home loan. Having a high credit score is not enough if you can’t convince the lenders that you are committed. You should therefore start by paying an amount of money that is more than what is specified as down payment. This will help in building trust between you and the lender which in return will earn you a low interest rate. The good thing is that you will not be paying extra money every month.