When it comes to buying a new home, you need to seek out the best possible mortgage rate. Even a few percentage points on your mortgage can eventually cost you tens of thousands of dollars in the long run. That is exactly why you need to seek out the best way to get a great deal on a mortgage. This way, you always know what to expect and save a considerable amount of money in the long run.
First, you want to check your credit score and look for any problems in the report. You can go to AnnualCreditReport.com, which is run by the credit reporting companies themselves, and they have to provide you a free report annually, without signing up for anything. Never use the report services you find on the television ads as these are just going to charge you, either immediately or eventually. Once you have looked over your credit report, you can go about paying off loans you might have forgotten about or make corrections to the report. Make sure to do this three to six months ahead of time, as it can take some time to make corrections.
As your credit score should improve some by making these corrections, you now need to save up at least a 20 percent down payment. While you can usually pay less, most lenders are going to give you a break and a reduced interest rate if you can pay at least 20 percent. This way, you are able to save a considerable amount of money, even if the change in your mortgage is only a half a percentage point.
If at all possible, you want to try and find a credit union instead of a bank. A credit union is going to provide you with a better deal on a mortgage than what an actual bank is going to provide you. Of course, you have to be part of the credit union ahead of time, so try to sign up for an account with your credit union as quickly as possible. Sometimes you can only become a member if you know someone or if you work for a company that is associated with the union. Either way, do what you can to become a member, it is going to pay off in the long run.
With all of this in mind, you can now start to think about your mortgage. If you have the funds, try to opt into a 15 year or 10 year mortgage rate instead of a 30 year rate. While you pay more per month, the credit union or bank is going to lower your interest rate as you are actually paying it off faster. While you can always pay more per month if you want on a 30 year mortgage rate, you are better off opting into the shorter time period. All of this should help you cut down your mortgage rate by several percentage points, saving you tens of thousands of dollars.