Things You'll Need:
- Internet Access
- Computer
-
Step 1
Work on keeping your personal finances and credit history in good standing. This is probably the single most important step in finding the lowest mortgage rate available. The worse your credit history and background, the higher risk you are to a bank or lending institution. This will result in either being offered a higher rate than someone with good credit, or being denied completely for the loan.
-
Step 2
Consider applying for a 15 year fixed loan or possibly an adjustable rate mortgage (ARM). It basically all depends on your needs and plans for the house you are purchasing. Taking out a 3-year ARM for example will come with a much lower rate for the first several years compared to a fixed loan. The question is how long you plan to stay in the home and is the risk of taking out and adjustable rate mortgage worth it.
-
Step 3
Buy extra points that can be applied to your loan to get the lowest mortgage rate possible. This may not be a good solution for everyone, but people who plan on staying in the home for a long period of time may benefit in the long run. Buying points against the loan basically lowers your interest rate, which may come in handy on a 30 year fixed loan!
-
Step 4
Shop around different banks and lending institutions for the lowest mortgage rates available. Don't be tied to a single bank or your credit union if you truly want the lowest rate possible. Often times you will go outside your traditional banking institutions to find the best possible deals.
-
Step 5
Think about negotiating closing costs with a potential lender. While most lending institutions are tied to the mortgage rates they offer, you still could benefit from asking for lower closing costs. Banks and lenders can typically negotiate this fee which benefits you overall.
