3 Tips for Getting a Great Mortgage Rate

a mortgage loan contract

These days, lenders are so selective about whom they make business with. As much as they would want to offer financial support to their customers, they are also not ready to risk non-repayments. After all, they are also in the business to make profits. Below are factors they will be keen on before determining the terms and rates of your loan. Take a look.

Check on your credit score.

This is one of the key factors upon which mortgage rates are adjusted. Not only is it based on your past borrowing and repayment history, but it’s also tied to the current credit obligations you have in your name. An excellent credit score means better loan approval chances and better interest repayment terms.

Make a substantial down payment.

Mortgage companies in Salt Lake City and elsewhere are also measuring your financial strength by looking at how much you can offer as a down payment. Therefore, you need to save as much as you can a year or two before you apply for a mortgage. This enables you to put a substantial down payment on the table which may qualify you for a much lower interest rate on your home loan.

Distinguish between types of mortgage rates.

While it may be essential to get a reasonable rate on your home loan, it’s equally crucial that you know the combination that suits your financial needs. It is also worth considering are the risks involved with each type of rate. If you go for a variable interest rate, your interest repayment is subject to change depending on economic times. But if you go for a fixed rate option, your interest rates remain locked for a particular period.

Applying for a mortgage can be quite complicated, especially for first-time applicants. However, making adequate preparations makes the whole process a lot smoother.