Purpose
Refinance Purchase Home Equity

Loan Type
Fixed ARM Interest Only FHA

Amount

State
Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District Of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming

Display Mortgage Rates &
Refinance Rates in your State

What Does It Take to Get the Best Mortgage Rates?

By Stacy Williams

Several factors contribute to mortgage rates, but the main three are credit score, down payment, and banking relationship. All are important, and if you don’t have down payment, but you have the credit, you will still get better pricing, but not the optimal pricing you’d like.

How Does Credit Score Work in helping me get the best mortgage rates?

Credit is the most important element. Before you apply for financing, check your credit score. 720 is excellent and will give you a decrease in the rate. If you have a score less than that, wait before seeking financing. Report errors on credit to the three bureaus (Transunion, Equifax, and Experion), and pay revolving debt down to where 70% of that credit line is available for use. You’ll see a difference in your score, but it’s going to take a few months to reflect.

How Much Down Payment is Needed to Get the Best mortgage Rates?

Ideally, 20% down will get you the best rate. Anytime you borrower more than 80%, your rate goes up, and you also get private mortgage insurance (PMI) added to the loan. Depending on the loan amount, it can make a pretty big difference in the rate and monthly payment. if you don’t have that much cash, consider going with an FHA loan. This is a government loan with lower PMI and a reduced interest rate. You only have to come out of pocket 3.5%.

What Does Banking Relationship Have to Do with Getting the Best Mortgage Rates?

If you bank with a larger institution and have a several accounts with high net-worth, you generally have a premier banker that will do your loan and get mortgage rates shaved down a bit. It’s considered a “perk” for being a preferred client. If you don’t bank with a larger institutions, try your local credit union.

Related posts:

1. What Is Mortgage Pricing Based On?
2. How Does My Credit Score Impact My Mortgage Interest Rate?
3. What Financial Criteria Affect Mortgage Interest Rates?
4. Who Qualifies For The Lowest Mortgage Interest Rates?
5. What Does The Bank Look At To Determine My Mortgage Rate?