When it comes to buying a house, you need to be very aware of how much you can afford to pay each month so that you can determine the price range to look for. You will need to take into consideration the insurance and taxes that will be added to your monthly payment and most importantly the interest rate on the loan. If you find the house of your dreams but the monthly payment is going to be more than you feel comfortable with, start looking into ways to get a lower interest so the payments will be less. Here are a few tips for getting low mortgage rates so you can get the home you want.
It can take a while to get your credit rating to change; while you are doing so, you should also be getting rid of some of your debt. This will make your debt-to-income ratio lower. Every debt you pay off or lower will make this ratio better and increase the faith the lender will have in you. They will not feel their money is at as much of a risk and will be willing to give you a better interest rate.
Having more money for a down payment will not only lower the amount you need to borrow, but it will also earn you a better interest rate. You may find it would be better for you financially to borrow money from a relative that will not show up on any credit report and get a lower interest rate. It is best if you can say the money was a gift if questioned about it. Remember, a gift of under $10,000 a year does not need to be reported to anyone.
If you are facing a high-interest rate, ask if the seller can give you a second mortgage on the place. This will lower the amount you need to buy and may lower the interest enough to allow for the second mortgage payment.
The best thing to do if you are struggling to find an interest rate low enough to allow you to buy the house you want is to talk with your real estate agent. These professionals have a variety of options available to help you get the loan you need at the price you can afford. They will also have insight into the different lenders and what they look for to grant a lower rate.