Financing your home is one of the biggest financial decisions you’ll have to make, and so it makes sense that you’re going to want to get it right the first time. To get the best mortgage for your unique needs, you’ll need a mortgage strategy to ensure long-term financial well-being while enjoying the benefits of homeownership. This blog will explore some mortgage strategies that can help you score lower mortgage rates.
Grow Your Financial Profile
The best mortgage rates are typically offered to buyers with strong financial profiles, particularly those with excellent credit scores. To get the best rates, you’ll need a credit score in the highest range (740 – 850). Of course, there are loan options available for those with lower credit scores, such as FHA loans and other non-qualifying loans, including jumbo loans, DSCR loans, and ITIN loans. However, these have higher interest rates, so it’s recommended to first grow your credit score.
In addition to your credit score, lenders will also consider your debt-to-income ratio, which should be no higher than 36%.
Get Pre-Approved Before House Hunting
Getting pre-approved for a mortgage before you start house hunting is an excellent way to speed up the process and help you determine your budget.
Shop Around
It may be tempting to accept the first loan offer that you receive, but it’s always best to shop around and see what other lenders can offer. You can always try your hand at negotiating a better rate and find a type of mortgage that meets your needs. For example, if you’re planning on building your home, a construction loan is a better option than a conventional loan.
Make a Larger Downpayment
The general rule of thumb when it comes to mortgages is that the more money you can put down, the lower your overall mortgage amount will be. This also means you’ll have less interest to pay. Because lenders offer the best mortgages to those that they perceive as lower risk, being able to put down a larger down payment can maybe snag you a lower interest rate and avoid private mortgage insurance.
While each lender will have their down payment requirements, it’s recommended to pay a down payment of at least 20%. Anything above that is a bonus.
Consider First-Time Buyer Programs
If you’re a first-time buyer, you may be eligible for several assistance programs. These programs have special mortgage programs with lower interest rates and assistance with down payments and closing costs. These programs can also be really useful for low-income buyers.
Choose Your Rate
When looking for mortgages, consider what type of rate you’re comfortable with. If you’re someone who doesn’t mind watching market rates and understands that your monthly payments will fluctuate, variable rates are a good choice and have lower interest. Fixed rates, however, offer stability and security over monthly payments.
Mortgage Experts in Florida
Are you ready to purchase your dream home with a mortgage? The team at Florida State Mortgage Group, Inc., can help you find a mortgage program that suits your needs and guide you through the process. Call us today at (954) 359-3000 and experience the difference.
Do you know how much home you can afford?
Most people don’t... Find out in 10 minutes.
Today's Mortgage Rates
