Rates and loan options seem to change daily. Use these insider strategies to lock in the very best home loan deal right now.
Getting a mortgage is one of the biggest financial decisions you can make. Finding the right loan program and interest rate can save you tens of thousands over the loan repayment period. Here are my top 7 tips for scoring the absolute lowest rate when compare the home loans:
Check credit reports and scores
Before even reaching out to lenders, pull your credit reports and scores. Knowing your credit standing gives you a realistic view of the rates you may qualify for. Sites like AnnualCreditReport.com and CreditKarma provide free access to your reports and scores. Identify any errors that could negatively impact your rates and get them resolved immediately.
With excellent credit (720+ scores), you’ll qualify for the top advertised rates. Take time to improve your credit if needed before applying for a home loan.
Research current rates and options
Rates change constantly in the mortgage world. As you seek out lender quotes, stay updated on average 30-year fixed rates and review rate specials lenders advertise. Resources like Bankrate and NerdWallet help you research average mortgage rates.
Ask prospective lenders not just about rates but also the types of home loan programs they offer – FHA, VA, jumbo, adjustable rate mortgages and more. Different loans have different advantages.
Get pre-approved
Early on, go through the pre-approval process which gives you a firm rate quote subject to final underwriting later. Pre-approval shows sellers you’re a serious buyer with the financing ready to go. As rates drop, you can usually lock your pre-approved rate lower.
Having a pre-approval from a credible lender makes your offer much more attractive to any seller. I recommend getting pre-approved with multiple lenders to find the best deal.
Compare multiple lender quotes
Never go with just one lender! Shopping and comparing loan estimates from several lenders is the only way to identify who truly offers the lowest rates and costs. Online lender quotes make this easy but also connect with local mortgage brokers and banks.
Look beyond rates alone at Origination charges, discount points, and lender fees which vary greatly. Ask about typical closing timelines. Finding a lender you connect well with is also key.
Negotiate fees/closing costs
There’s often room to lower your closing costs and fees to save thousands in upfront costs. Briefly explain your situation and ask lenders what they can do to reduce your out-of-pocket expenses to win your business. It never hurts to politely ask!
Also request a detailed fee breakdown from the Loan Estimate to identify any junk fees you can have removed. Every dollar counts when buying a home.
Lock rate as soon as possible
Today’s rate may be long gone tomorrow. Once you begin contract negotiations on a home, formally lock your rate ASAP. Lock periods typically range from 30 to 90 days.
Ask upfront when you can lock and for how long to avoid getting stuck at higher pricing later. Floating without a lock is risky in competitive markets. Protect your rate early!
Don’t change financial situations
After applying and pre-approving, avoid changing jobs, making major purchases, or taking on new debt before closing as this may jeopardize your approval. Your lender must verify your finances remain consistent up to closing.
Alert your lender immediately if your situation unavoidably changes. Maintaining open communication ensures you get to the closing table no matter what.
I hope these home loan shopping tips help you lock in the absolute best rate and lender match! Let me know if you need any other guidance on optimizing the home buying journey.