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How to Find the Best Mortgage Rate in the USA?

By Al Twitty | December 29, 2021

Your mortgage is going to be one of the biggest financial decisions you’re likely ever going to make. So when getting a mortgage, it’s important to do it right. And by right, we mean getting the best mortgage rate possible for your personal circumstances. Getting an inexpensive mortgage rate with low interest will allow you to save on thousands - if not tens of thousands of dollars during the duration of your term.
All interest rates do is take money out of your pocket and give it to the bank just for letting you borrow the money to buy your dream home.

A businessman pressing a Mortgage Advice business concept on a graphical display of cogs

In this guide, we’ll go through a couple of tips you can use to get the best mortgage rate in the USA and save thousands of dollars in the long run.

Improve Your Credit Score

One of the best ways to secure better mortgage rates is by increasing your credit score. While the average credit score in America is between 670-690, it’s best to get your credit score much higher than the average. Most experts recommend aiming to improve your credit score to around the 720-850 range, as this will increase your chances of securing lower interest mortgage rates.

To improve your credit score, you pay bills on time, do not take out any loans or apply for new credit cards, and make substantial payments on existing debts.

Save Up For Larger Down Payments

People who buy their homes with a smaller down payment are considered higher-risk borrowers by most lenders. So, to increase the chances of getting better rates, it’s best to save up for a larger down payment. This might mean tightening your budget a little bit for some time until you have enough and get a mortgage then.

Talk To Different Lenders

Different lenders offer different rates. While a large chunk of your mortgage rate and interest rate is dependent on your credit score, financial history, and more, you might be able to get better and more affordable mortgage offers with different lenders. When seeking out your first mortgage, try to talk to different lenders or a mortgage broker like Breezeful to see which one can offer you the best deal. You may also get in touch with a credit union and ask about their credit union rates for home loans.

Consider Different Mortgage Terms

While it might be easier to spread out your mortgage payments over a 20 or 30-year term, it’s much easier to get lower rates with shorter-term mortgages. This requires slightly higher monthly payments, down payments, and more-stable incomes, but it can result in huge savings when buying a home. Shorter mortgage terms may cost more in the short term because of higher regular payments, but you’ll end up saving a lot by paying off your mortgage sooner.

So, when looking at the mortgage options available to you, try considering a 10 or 15-year mortgage term. That way, most of the money from your monthly mortgage repayment will go towards the loan as opposed to the interest.

Conclusion

Getting a mortgage can be overwhelming. However, it’s important not to let all the complications of getting a mortgage get in the way of finding the best deals. When applying for your first mortgage, make sure to keep these four tips in mind as they can save you a lot of money down the line.

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