Real Estate

4 Tips for Ensuring the Best Mortgage Rates in Houston, TX

A mortgage rate is one of the important things that are associated with a home loan program. Do you know what this is? Well, it indicates the annual cost to borrow money from your lender. Expressed as a percentage of your total loan balance, you need to pay it on a monthly basis. Higher mortgage rates mean you need to pay a bigger amount over the life of the loan while you can save money with a lower mortgage rate. This is why; home buyers want to get the best mortgage rates for the loan program.

But how to ensure the best mortgage rates in Houston, TX? Follow these tips –

  • Work on to improve your credit score

Mortgage lenders offer low credit scores to the ones who have an excellent credit score because one’s credit score reflects his or her creditworthiness. The higher the score the better creditworthy that person would be. It is the benchmark in deciding the person’s ability to repay the debt. So, the higher the score the better the likelihood that the person would not default. If you don’t have a good credit score, you should take steps to improve it, including clearing all the previous debts, paying the bills on time, not applying for any new credit, checking for errors and improving these, etc. Do everything that it possible for you to do for improving your credit score.

  • Build a record of employment

Another parameter that can help you to get the best mortgage rate is your employment history. Lenders check the employment history of borrowers before approving the home loan application. You are more attractive to any lenders if you can show at least two years of steady employment and earnings, especially from the same employer. Besides, you should be prepared to show pay stubs and W-2s. But it would be difficult for you to qualify if you are self-employed or your payment is coming from several part-time jobs.

  • Save as much as possible for a down payment

Coming with a hefty down payment can help you obtain the best mortgage rate for the loan program, especially, if you have enough liquid cash to fund a 20 percent down payment. Of course, the lenders will accept low down payment. But the lower the down payment, the higher the mortgage rate would be. And you have to pay private mortgage insurance that can range from .05 percent to 1 percent of the original loan amount annually. Home loans, such as FHA loan, allow gift money and finance from down payment assistance programs as down payments. So, you can check all these options to ensure decent down payment for your home loan program.

  • Shop for several lenders

When you are looking for the best rate for your loan program, do the necessary research to make sure you’re getting the best fit for your situation. Look beyond your neighboring lender, whom you know for a long time. Ask for quotes from several lenders, compare them to know who is offering the highest and lowest rate, and then decide who to opt for.

So, work on the mentioned things and ensure the lowest mortgage rates for your mortgage loan.

Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.

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