New House: 5 Ways to Get the Best Rate on your Mortgage

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People around the globe tend to put in a lot of effort in order to get a house of their own. They love the security that it offers. Getting a house is no longer a tedious or a difficult task. On the contrary, it has become very simple and easy. You won’t need to have a big capital, just make sure you have a good credit history.

Buying a house has become easy mainly because all banks and lenders offer mortgage loan. There is an interest rate attached to it, but we hardly have any interest free loans.

However, if you know these techniques then  you can easily get the best rate on your mortgage.

Credit Score

There are numerous deciding factors for a mortgage rate. Among these factors, the important one is credit score. Your FICO credit score will determine the amount of loan you will get and the rate on it. A good credit score means a lower mortgage rate.

Income Stability and Employment

Lender prefers people who have a stable job for the past two years. This ensures that the person will be able to pay the loan back. In case you have your personal business, the rules are firmer. You will have to provide a lot of business documents, income returns of the past two years and much more. Before issuing you the mortgage, the lender calculates Debt-To-Income ratio along with down payment feature. A higher down payment leads to a lesser rate.

Cash Reserves

Cash reserves generally refer to the money you have in your saving account. The standard requirement for a cash reserve account is minimum 60 days. It means your account should be able to pay back the lender for at least 2 months in case you are unable to make the payment. You will get a good mortgage rate is you have more reserves in your account.

Look for the best rate: Just don’t buy from the first shop you visit. Look around and there is a possibility that you might get the best rate on a mortgage loan.

Reach out to a Professional: It is always better to ask a professional before getting into something like this. You can reach out to for help and guidance.