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10 Ways to Get a Lower Mortgage Rate [2024]

10 ways to get a lower mortgage rate
10 ways to get a lower mortgage rate
Brian Reese
May 10, 2024

Securing a lower mortgage rate can result in significant financial savings over the life of your loan. While many borrowers focus on their credit score or the size of their down payment, there are several lesser-known strategies that can help you achieve a more favorable interest rate.

From buying mortgage points to choosing the right loan term, this post explores 10 ways to get a lower interest rate on your mortgage, ensuring that you not only save money but also manage your financing more effectively. Alright, let’s begin!

How to Lower Your Mortgage Rate: Top 10 Tips Revealed

#1. Boost Your Credit Score

Your credit score is a key factor in determining the mortgage rates you are offered. Higher scores typically qualify for lower rates because they indicate to lenders that you are a lower-risk borrower. To improve your score, pay your bills on time, reduce your debt load, and check your credit reports for any inaccuracies that you can dispute.

#2. Consider Shorter Loan Terms

Typically, lenders offer lower interest rates for shorter loan terms. For example, a 15-year mortgage often has a lower rate than a 30-year mortgage. While the monthly payments are higher due to the shorter amortization period, the total interest paid over the life of the loan can be substantially less.

#3. Buy Mortgage Points

Points, also known as discount points, are fees paid directly to the lender at closing in exchange for a reduced interest rate. One point costs 1% of your mortgage amount and can lower your interest rate by about 0.25%, though this varies by lender.

#4. Shop Around and Compare Offers

Interest rates and terms can vary significantly between lenders. It’s important to compare offers from several financial institutions, including major banks, credit unions, and online lenders. This can help you leverage the most competitive rate.

#5. Negotiate Closing Costs

Some lenders may not be willing to move on the interest rate but might offer concessions on closing costs. This can include waiving origination fees or covering some third-party fees like appraisal costs. The savings here can add up and indirectly reduce the overall cost of your loan.

#6. Make a Larger Down Payment

By putting down more money upfront, you decrease the lender’s risk and often qualify for a lower interest rate. Furthermore, a down payment of 20% or more typically avoids the need for private mortgage insurance (PMI), which can add to the monthly cost of your mortgage.

#7. Improve Your Debt-to-Income Ratio

This ratio measures your total monthly debts against your gross monthly income. Lowering your debt-to-income ratio by paying off debts can make you more attractive to lenders and potentially qualify you for a lower inteest rate.

#8. Consider Different Loan Types

Each loan type, whether it’s a fixed-rate, adjustable-rate, FHA, or another kind of loan, comes with different rates and terms. Sometimes, government-backed loans like FHA or VA loans offer better rates for qualifying individuals, especially those with lower credit scores.

#9. Lock in a Rate at the Right Time

Mortgage rates fluctuate based on market conditions. If you believe rates are particularly low, you can choose to lock in the rate for a period (usually for a fee), protecting you against rate increases while your loan application is being processed.

#10. Build a Strong Financial Profile

Demonstrating financial stability through continuous employment, a steady income, and responsible financial behavior makes you less risky to lenders. Lenders might offer you better rates if they believe your financial situation is stable and secure.

Conclusion and Wrap-Up

In conclusion, lowering your mortgage rate is not only possible but can result in significant long-term savings. By implementing strategies such as boosting your credit score, exploring shorter loan terms, and investing in mortgage points, you can enhance your appeal to lenders and secure more favorable rates.

Additionally, shopping around for the best offers, negotiating closing costs, and choosing the right loan type tailored to your financial situation can further reduce your expenses. Every small percentage point counts when it comes to your mortgage rate, and the efforts you make today can lead to substantial financial benefits over the life of your loan.

Want a Better Mortgage Rate? WE CAN HELP!

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  • District Lending is on a mission to disrupt the traditional mortgage industry. Buying a home can be incredibly frustrating so we decided to make it EASY through our technology and exceptional customer service! We can help you save money and close your instant HELOC loan fast (as quickly as 5 days from start to finish). Click here to get in touch with us for your instant HELOC.
  • Lower rates. Zero lender fees. As a mortgage broker, we have access to over 50 lenders. This means that you have more options to choose from, making it easier to find the perfect loan. What makes us different is that we’re able to offer great low rates to consumers every single day (we have very low overhead with no layers of overpaid middle management). Check Today’s Rates Now!
  • We’re extremely fast to close, but never cut corners. We’ve engineered our process to close other types of loans in as little as 18 days. We also monitor our competitors’ rates and always make sure ours are lower.

>> Click here to get your mortgage rate quote in 60 seconds or less!

About the Author

Brian Reese USAF Veteran

Brian Reese is a senior advisor and co-owner at District Lending. He is one of the world’s leading experts in veteran benefits, having helped millions of veterans secure their financial future since 2013. Brian is the founder VA Claims Insider, an education-based Coaching & Consulting company whose mission is to educate and empower veterans to get the VA disability benefits they’ve earned for their honorable service. A former active-duty air force officer, Brian deployed to Afghanistan in support of Operation Enduring Freedom. He is a distinguished graduate of management of the United States Air Force Academy and earned his MBA as a National Honor Scholar from the Spears School of Business at Oklahoma State University.

Buy a home and refinance at no cost.
get a quote
Buy
Home Purchase
Why District
Read about all the benefits
Process overview
Simplified and easy to understand
Apply now
Start your application
Get a quote
See your rate with no commitment
Perks
Free refinance for 3 years
Refinance with no closing costs
No closing costs
Zero costs options, what it means
Realtor credits
Get .5% towards your closing costs
18 Day closing
2X more likely to get your offer accepted
Price match guarantee
We beat competitors’ rates by .125% or more
Rate defense
Never miss out on rates dropping
Refinance
Rates
About
Reviews
Hear from our customers
Contact
Answers within 2 business hours
Meet the crew
Our experts, mission, and values
Careers
Join us in making a difference
Learn
Blog
Our knowledge at your convenience
Mortgage secrets
Short videos with tips&tricks
Video library
A short description can be here
Calculator
Calculate your mortgage payment
Apply nowGet a quote