Tips to Prepare for Better Mortgage Rates and Monthly Payments

Great mortgage rates depend on a lot of factors. Firms do not just take credit score when gauging qualification. They look at other factors that go beyond approval and influence aspects of the mortgage itself. Such factors influence interest rate and monthly payment. If you want a good rate, it will take some preemptive steps to achieve.

Mortgage rates are attached to various points of percentage leading to lower or higher payments. Molding qualifications to influence better rates can save thousands of extra dollars in interest over the loan’s lifespan. If you are looking for a good deal it will not just be dependent on the firm offering the loan, it will also stem from your qualifications.


A FICO credit score determines loan qualification. A poor score will restrict you from garnering a loan so beefing up that number is very important. Additionally, FICO credit scores effect interest rate. This is because mortgage lenders use tiered pricing, the better the tier your score lands on, the better adjustment given to your rate. Usually, the best rates are afforded to individuals whose FICO is over 760. Mortgages can be offered for scores as low as 500, but the rates attached will not be great. So, improving credit score is key to approval, but if you want a decent rate you will want to go much farther.

Income Stability

Obviously lenders will want to assure that you are good for the loan they give you. Therefore, they will take a close look at employment. They will look at how long you have been employed, whether you have experienced long bouts of unemployment, and your overall yearly income. Having a job for more than two years looks good, getting a promotion within that time looks better. Also, if you are self-employed it is a good tip to start keeping financial documentation now, because they are going to want it.

Finding Good Rates

Comparison shopping is an essential part of getting good rates. Even after you have satisfied everything you need; the outcome of your mortgage will depend on the rates offered by the firm. As firms offer different rates it is a good idea to research and price match. There are many websites and sources available, all you must do is enter your criteria. So, if you are looking for mortgage rates boise id, you can find what you need.

Down Payment and Cash Reserves

Loans that are given a 5% down payment are considered high risk. This classification can lead to higher payments and risks. So, it is a good idea to build up at least 20% of a down payment. This prevents you from having to file additional paperwork and allows for a better classification on your file. You will be a lower risk which provides better rates. Also, firms will look at cash reserves as well. It bodes well if you have enough saved to constitute a few months’ worth of payments.