Finding the best mortgage rate in Provo is just a single aspect of the multi-faceted process of finding a lender. However, once you find the lender that offers the lowest rate, you are one more step closer to hitting your goal.
It’s no secret that buying a house can be one of the scariest, most unnerving things you’ll have to do in your life. But once you find the perfect house and the best financing option for your needs, you soon realize all the stress and confusion was worth it.
Here are the steps you need to do to find the lender that offers the best mortgage rate for you.
1. Clean up your credit.
The higher your FICO score, the better. The lowest rates are offered to buyers with a score of 760 and above, although you can qualify for a home loan if your score is at least 620. However, with better credit, you can count on lower interest rates and more loan choices.
2. Do your comparison shopping.
Don’t just rely on a lender recommended by your agent. Look for them yourself. Online tools such as Bankrate and Zillow are both good sources of loan rates. You can key in your information and they will provide a list of lenders offering the lowest rates for your situation.
3. Offer a huge down payment.
Paying more upfront can save you more in monthly mortgage payments in the long run. Lenders consider a 20% down payment as low risk, giving you better mortgage rates, while a 5% down payment elicits higher monthly payments.
4. Consider adjustable rates.
If you’re planning to stay in the house for a short time, go for an adjustable rate mortgage (ARM), then sell your home before the lender adjusts the rate. Making fixed mortgage payments with high interest for 30 years doesn’t make sense if you plan to stay in the house for only half a decade.
Finding the best lender can be complicated, but you don’t have to drown in the confusion if you stay organized and informed. The best lender should be able to give you the most competitive rate and provide the most seamless and stress-free process for you.