07/19/2023
Do you own a home or thinking about buying one?!?
Here are 5 ways you may be able to lower your interest rate and reduce mortgage payments, both at signing and during your loan term.
1.) IMPROVE YOUR CREDIT SCORE
Regardless of the loan you choose, you’re likely to get a better mortgage rate if you have a higher credit score. Similar to making a bigger down payment on your mortgage, a high credit score can help you qualify for better rates and lower monthly payments.
2.) SHOP FOR MORTGAGE RATES
When looking for mortgages, be sure to contact several different lenders to get the best mortgage rate possible. Mortgage bankers, regional banks, national banks and local credit unions may all offer distinct loan products, each with their own rates and fees. Some lenders cater to new homeowners, while others are better for refinancing.
3.) CAREFULLY CHOOSE LOAN TERM
Short-term loans are less risky and, as a result, have lower mortgage rates. The trade-off for these kinds of loans are larger monthly payments since you're paying off the principal in a shorter time. With a longer-term loan, you spread the payments over a longer period of time, leading to lower monthly payments with a higher interest rate.
4.) BUY MORTGAGE POINTS
If you plan on owning your home for a long time, buying mortgage points might be a clever way to save money. Paid at the time of closing, each mortgage point has a value equal to 1 percent of your mortgage. In exchange for these upfront payments, the interest rate is reduced and monthly mortgage payments are smaller. Keep in mind, however, the time it will take to recoup your savings. Known as the break-even point, this is the length of time in months it will take for your total savings to add up to the cost of the points. If this time is longer than you plan to own the home, mortgage points may not be worth it for you.
5.) REFINANCE MORTGAGE
Renegotiating the terms of your mortgage can save you money over the loan’s course. There are a variety of refinancing options available, each with their own pros and cons. Here are some refinancing options and ways they can save you money on your mortgage rate.
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Epic Real Estate Group
