For many new buyers, the hardest part of getting into their first home is finding a great mortgage to help pay for the house. The best place to start is by comparing different conventional and FHA mortgage rates from different lenders, but you still need to set your application up for success from the beginning. If you’re not sure how, don’t panic. Here are a few simple tips to help you get the best mortgage rates in 2020.
Look at Your Credit Score
Every lender, no matter what type of mortgage you’re applying for, will check your credit when they process your application. This gives them a better understanding of your finances and helps them decide if you’re a low-risk borrower capable of paying the loan back in full. The higher your credit score is, the better. Check your credit score and see where it falls. If your score is below 650, start doing what you can to increase it before you apply. Pay down existing debts and avoid taking out new loans before you start shopping for the best FHA mortgage rates. Once your score increases, you’ll start to get better rates.
Save for a Down Payment
The best conventional and FHA mortgage rates tend to go to borrowers that have a down payment set aside for the purchase of their home. The larger the down payment is, the more favorable your rates will be. That said, you don’t have to save the full 20 percent of the home’s purchase price to qualify for a loan. Just save up as much as you can before you apply and let your lender know that you’re planning on using that amount to secure the loan.
Increase Your Income
When you work a salaried job, your pay won’t increase that frequently, but that doesn’t mean you can’t find creative ways to increase your income and make your application stronger. Take on side gigs like dog walking or tutoring. Snag a part-time job doing something you love. Whatever it is, the more money you can bring in, the better your FHA mortgage rates will be.
Getting the Best Rates Is Simple
Ultimately, qualifying for the best conventional or FHA mortgage rates is as easy as keeping an eye on your finances. Keep these tips in mind and you’ll get qualified for affordable loans with great terms whether you’re buying your first home or your third. Ready to apply for financing? Apply online now.
