So, you’re ready to buy a Cactus Acres home for sale. Now, it’s time to apply for a mortgage. It’s best to get pre-approved before you start home shopping. A few things go into deciding what interest rate you’ll get along with if you’ll be eligible for a lower rate.

 

Good Credit Score

First, a high credit score is key in applying for a mortgage on a Cactus Acres home for sale. This tells lenders if you’re credit worthy. A high score shows that most likely you’ll repay your loan. A low score might not get you the loan at all or you could end up paying a higher mortgage rate. 

 

FICO credit scores are calculated based on your payment history, credit utilization, credit history, new credit accounts, and credit mix.

 

Long Work History

Next to a good credit score, lenders want to see that you have a consistent and long work history. You’ll likely get a good rate if you’ve been at the same place for many years and can show an increase in annual income. 

 

On the other hand, if you’ve changed jobs a lot recently, lenders might be afraid of giving you a loan for the Cactus Acres home for sale since your income isn’t as reliable. A lender will check your employment status during the closing process. If you change jobs during this process, you could risk getting a mortgage. 

 

Shop Around  

Before applying for a loan for the Cactus Acres home for sale, shop around to get the best rate possible. It’s a lot easier today than it was a couple of decades ago thanks to the web. 

 

Ask For a Better Rate

If you have a credit score over 800, which is considered exceptional, ask your lender to lower your interest rate. See if a competitor’s rate can be matched. Lenders sometimes will go the extra mile to get your business if you have a great credit score. 

 

Put More Money Down

Depending on the price of your Cactus Acres Home for sale, putting more money down might lower your interest rate. Loans over $417,000 usually carry a higher interest rate so a larger down payment might lower it. 

 

Shorten Your Loan

Shortening the length of your loan can also lower your interest rate. Taking out a 15-year or shorter length loan should definitely lower the interest rate on your Cactus Acres Home for sale. No doubt, it’ll save you money over the course of the loan.

 

Adjustable-rate vs. Fixed-rate

Getting a fixed-rate mortgage, you won’t have to worry about your interest rate going up like you might with an adjustable-rate loan which adjusts higher to match the prime rate.

 

Pay for Points

Paying for points is another way to lower your mortgage rate. Each point equals 1% of the value of the loan. For each point you pay, it’ll typically lower your interest rate by 0.125%. 

 

Automatic Mortgage Payments

Some banks offer a lower interest rate if you set up automatic mortgage payments since this ensures you’re never late on your payment. However, if you change lenders, that discount can always be removed. 

 

Refinance

Refinancing is a great way to lower your interest rate. You might even be able to shave a few years off your mortgage.