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With Mortgage Rates Rising, Here Are Six Ways to Negotiate a Lower Rate
If you’re a prospective homebuyer, rising mortgage rates are probably cause for concern. Higher mortgage rates could price some people out of the market. There are, however, several ways to negotiate a lower rate. In fact, the following six paths to a lower rate are from a very reliable source…Realtor.com. Raise your credit score and lower your debt. Lenders will be more willing to negotiate with those who appear to be responsible borrowers. They look for high credit scores, indicating the borrower has a history of making credit payments on time. They also appreciate low debt, as it means a borrower will have more money available to put toward his/her mortgage payments. Make a big down payment. The more money you put down, the less lenders are likely to see you as a risk and negotiate a rate. Aim to put down 20 percent of the cost of the home if possible and it doesn’t strap you financially. Buy mortgage points. If you have extra cash, consider buying points to drop your mortgage rate. Points are sold in small increments (.25 percent) and generally cost around one percent of the mortgage amount. This can pay off if you plan to stay in your home for a considerable amount of time. Buy new construction. New home builders are much more willing to cut a deal, and that includes buying down the mortgage rates of buyers and offering rate locks. Shop around. As mortgage rates rise, lenders are seeing a drop in borrowers and are often hungry for business. By talking to more than one lender, you can play them against each other to land the best rate. Consider different types of loans. Government loans or government-backed loans sometimes offer lower mortgage rates. Veterans and U.S. Armed Forces members can apply to the U.S. Department of Veterans Affairs for mortgages. Likewise, the U.S. Department of Agriculture and Federal Housing Administration loans often give borrowers good rates, depending on their credit history and debt.
If you’re a prospective homebuyer, rising mortgage rates are probably cause for concern. Higher mortgage rates could price some people out of the market. There are, however, several ways to negotiate a lower rate. In fact, the following six paths to a lower rate are from a very reliable source…Realtor.com. Raise your credit score and lower your debt. Lenders will be more willing to negotiate with those who appear to be responsible borrowers. They look for high credit scores, indicating the borrower has a history of making credit payments on time. They also appreciate low debt, as it means a borrower will have more money available to put toward his/her mortgage payments. Make a big down payment. The more money you put down, the less lenders are likely to see you as a risk and negotiate a rate. Aim to put down 20 percent of the cost of the home if possible and it doesn’t strap you financially. Buy mortgage points. If you have extra cash, consider buying points to drop your mortgage rate. Points are sold in small increments (.25 percent) and generally cost around one percent of the mortgage amount. This can pay off if you plan to stay in your home for a considerable amount of time. Buy new construction. New home builders are much more willing to cut a deal, and that includes buying down the mortgage rates of buyers and offering rate locks. Shop around. As mortgage rates rise, lenders are seeing a drop in borrowers and are often hungry for business. By talking to more than one lender, you can play them against each other to land the best rate. Consider different types of loans. Government loans or government-backed loans sometimes offer lower mortgage rates. Veterans and U.S. Armed Forces members can apply to the U.S. Department of Veterans Affairs for mortgages. Likewise, the U.S. Department of Agriculture and Federal Housing Administration loans often give borrowers good rates, depending on their credit history and debt.
