5 Times You Can Turn a Bad Mortgage Rate Much Better

Everyone wants to chase the best mortgage rate in Utah, but it can be elusive enough to be out of reach of many borrowers. There are many factors that affect the mortgage rates in different locations in the country. Fortunately, interest rates are rarely set in stone. You can always make something bad more favorable for as long as you’re prepared to make some concessions.

Here are the things you should do to negotiate more effectively during your search for the best mortgage rates in your location:

Shop Around Hard

It always pays to be informed and educated about the ventures you are about to make. Knowledge is power as they say; the more you know how competitive lenders are, the more you can use them to your advantage. Pre-qualify with as many mortgage companies as you can to get a good idea about how much you can borrow without affecting your credit. Unlike pre-approval, pre-qualification generally doesn’t involve hard inquiries.

Be More Creditworthy

Build your creditworthiness in order for you to negotiate for better mortgage rates. Bear in mind that your negotiating power is only as good as your creditworthiness. If your credit score isn’t high enough to convince more lenders to play ball, work hard to increase it first. Take the necessary steps to raise your score. To do this, you must avoid missed payments, lower your credit utilization, and don’t open new accounts ahead of your mortgage application.

Have Stable Employment

Nothing turns lenders off than borrowers with spotty job record. Generally, you need to have a stable source of income for at least 24 months. Most mortgage lenders would feel more comfortable negotiating with you if you’ve been in the same company for two years with a bright career outlook. A solid employment record will give lenders the assurance of your capability to pay, as well as your consistency with making those payments.

Put Down 20%

Couple with a real estate agent

In general, the less you borrow, the less risk there is for the lender. Paying a large down payment is easier said than done, but it does more than just helping you lower your mortgage rate. Putting down 20% allows you to avoid private mortgage insurance, and pay for less interest with a smaller loan amount.

Buy Discount Points

Buying down your mortgage is a method to prepay your interest. You can do this by purchasing discount points upfront. The cost of one point can vary from lender to lender. This is a viable option if you can recoup what you paid at closing over time. In other words, you need to keep your mortgage long enough to make it a good deal.

As a rule of thumb, you need to combine a great working knowledge of mortgages with creativity to formulate effective strategies to negotiate. It also pays to consult an experienced broker with a good handle on home loans to unlock deals you never thought were possible. Doing things on your own is great, but you can accomplish much more with expert help.

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