Tips for Securing a Lower Mortgage Interest Rate

As mortgage rates drop following the Federal Reserve's recent rate cuts, are you reassessing the timing of a purchase?  If so, consider other options for getting the best possible mortgage interest rate.  Lower rates can save you thousands over the life of your loan. Here are some practical tips to help you secure a lower rate:

• Improve Your Credit Score: Lenders offer better rates to borrowers with strong credit. Pay off outstanding debts, make on-time payments, and check your credit report for errors.
• Save for a Larger Down Payment: Putting down a significant amount, typically 20% or more, reduces the lender's risk and could qualify you for better rates.
• Shop Around: Don't settle for the first offer. Compare rates from multiple lenders, including banks, credit unions, and online lenders, to find the most competitive option.
• Lock in Your Rate: Once you find a favorable rate, consider locking it in to protect against market fluctuations while your loan is processed.
• Consider a Shorter Loan Term: While monthly payments may be higher, shorter loan terms often come with lower interest rates, saving you money in the long run.
• Pay Points: Buying discount points upfront can reduce your interest rate. However, do the math to ensure the upfront cost is worth the long-term savings.
• Maintain Stable Finances: Avoid major financial changes, like taking on new debt or switching jobs, while you’re in the mortgage process, as these can impact your eligibility.

By taking these steps and doing your homework, you'll be in a strong position to secure a lower mortgage interest rate and make the most of your investment when you are ready to buys. 

Full Details:  Kiplinger (11/1)