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How to Negotiate a Better Mortgage Rate

Mortgage rates always seem to change and shift at random moments, and right now, they're lower than they have been in years. Because of this, homeowners who purchased their properties ten years ago are staring this rate down and considering what it means for them. 

If you want a better mortgage rate so that you can save some money, here’s everything you need to consider.

Consider Why You Want to Negotiate

Why do you want to negotiate? Is your interest rate too high? Or are you wanting to stretch it out over more years so that your monthly payments are far lower? How much can you afford? These questions are usually things to think about while following the steps to buy a house but don't be shy about making whatever changes are necessary. If lowering your monthly payment is why it's a good reason!

Look At What You Qualify For

Everyone qualifies for different rates, amounts, and companies. When you're ready to change your rates, think about your credit score and your payment history. If your score is below 740, it's a good idea to consider taking the time to build this number up so that you don't have to worry about losing money due to your credit. It's also important to ensure that your payment history is at least reaching the minimum every single month, or you could face major issues when it's time to update your rates.

Compare Rates from Many Lenders

Don't go to the first lender you find! Instead, shop around and seek out a company that offers what you need and gives you the chance to go through all of their paperwork and information without you having to put in your data yet. Remember that hard inquiries will hurt your credit score and may end up making your rates worse in the long run if you apply at too many lenders.

Improve Your Credit Utilization

The sweet spot of credit utilization is between twenty to thirty-five percent. The best way to ensure you're using this well on your credit cards is to set aside one purchase every month, or every week, whether that's groceries or an electricity bill, and pay it with your credit card. Then, after your account becomes due on your credit card, pay that off immediately. Don't pay before it sends you a 'due by' amount, or it might not show up as utilized on your credit report.

Make a Larger Down Payment

The larger your down payment is, the better off your credit score is. This means taking the time to pay down a large portion of your new mortgage so that it never has to be touched by the rate you'll have to pay directly to your lender. If you have the money for it, this is an awesome option.

Smaller Mortgage Means Smaller Monthly Payments

The smaller your mortgage is, the smaller your monthly payments will be. Take your time to fix your credit score and payment history, shop around, and reflect on what you need from a mortgage company, and you'll be set in no time! 

David 'Master Pogi' D'Angelo
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