The global pandemic has created new appreciation for home ownership. Homeowners can benefit from having some space to spread out and, in many cases, have their own outdoor living areas. This has inspired others to take advantage of homeownership. Those who are looking to make a real estate purchase in 2021 can take proactive steps to help better ensure they get a good mortgage rate. Three tips to help achieve this goal include:
- Watch your credit. You can change your credit score. By making payments on time you can boost your score. A good credit score can translate to a better mortgage rate. As a result, it is helpful to make sure to make payments on time at least a couple of months before you plan to apply for a mortgage.
- Review your debt. Having a good debt-to-income ratio is another way to get a better mortgage rate. If possible, pay off some debt before sending in the mortgage application. Lenders often look for a debt-to-income ratio of 36% or less. A lower ratio often means a better mortgage deal.
- Prepare a down payment. Having a large down payment will also help to reduce the mortgage interest rate.
Thankfully, according to a recent publication in Business Insider, it appears mortgage rates should remain low for the next couple of months. This can give buyers some time to make the adjustments noted above to help get a better mortgage rate.
Those who have purchased a home and are struggling to make their payments also have options. Refinancing as well as negotiating with the lender are two of many options to help get more manageable payments.