As mortgage interest rates climb to an eight-year high, many people are shying away from purchasing a home. However, those who are still interested in purchasing a house need to know all of their lender options in order to get the best possible interest rates on their mortgage loan. First Fidelis in the Kansas City Metro Area has some advice for potential homeowners in the area.
1. Shop Around
It is important that home buyers take the time to shop around for the best possible rates. When rates are increasing, the best thing that you can do for yourself is to shop around and look into different lenders. Some mortgage brokers, like First Fidelis, do all of the work for you.
At First Fidelis, we have 17 different lenders that we can talk to to find the best rates for all of our customers. With so many options, you can shop around without having to call numerous lenders yourself. Let us take the guesswork out of your options today.
2. Improve Your Credit Score
Before you start contact mortgage lenders, work on improving your credit score. A higher credit score shows banks that you are less likely to default on the loan, so they are willing to let you borrow money for less. If you don’t have a great credit score, it might be a good idea to hold off on buying a home until you can improve your credit score. If you can get your credit score into the 700+ range, you are much more likely to get better interest rates on your home loan.
To help improve your credit score, you should make sure that you are spending no more than 20 to 30 percent of your available credit limit, paying all your bills on time, and that you don’t have any credit card debt.
3. Prepare a Down Payment
You will be required to put a certain amount of money down on a home, but the more you can put down, the better the interest rates you will receive on the loan. To get the best rates, you will need to put down at least 20 percent of the cost of the home. With less than 20 percent down, you are going to have to pay private mortgage insurance, which will increase how much you are paying on your loan each year.
Another great bit of advice is to have at least two to three months’ worth of cash reserves in a savings account before you go to purchase a home.
When it comes time to purchase a home, don’t settle for an average or poor interest rate. There are ways to get better rates and taking the time to figure these out will help you get a better deal on your mortgage loan.
If you are interested in buying a home in the Kansas City area, contact First Fidelis today at 913-205-9978.