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Step 1
Get a good credit rating. There are many programs out there for people with bad credit, but those will just help to get a good loan. In order to get the best mortgage interest rates you have to have good credit. This means no collections, no late payments, a sufficient amount of open credit with low balances and a history of paying off debts.
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Step 2
Lower your debt ratio. Where it is important to have some debt, you do not want to be consumed with debt or you will now be able to get the best mortgage interest rates. In fact, if you have too much debt, you will not be able to get the loan. You debt must also be low in proportion to your income so that the lender knows that you have enough expendable cash to pay your loan.
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Step 3
Flexible interest rates can be a great way to get lower mortgage interest rates, however these programs come with a whole other set of problems. Flexible rates can go up with the market so you do not want to get yourself into a situation where you are unable to pay your mortgage due to an increase in your mortgage interest rates.
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Step 4
Buy points. Points are a great way to get lower mortgage interest rates if you have a little cash in the bank. This is a program offered where you pay cash up front to lower the rate. These are fees paid to the bank in exchange for the lower payment. These discounts have nothing to do with the federal interest rates.
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Step 5
Barter a little. If you get a quote from one company which is better than the others, ask the others to beat it. Many times they will beat it. You can play the companies against each other to make sure you get the best mortgage interest rates possible.
Comments
writesource said
on 12/29/2008 Great tips, 5 stars!