Since the November presidential election, mortgage interest rates have moved higher. And while mortgage interest rates have decreased from post-election highs, many housing analysts expect higher rates throughout 2017.
Though there’s no guarantee mortgage rates will continue to rise, it’s important to know how to secure the lowest rate for your mortgage.
If you’re planning on buying a home in 2017, here are some tips on securing the lowest interest rate possible:
Buy down your interest rate
A common practice in the mortgage industry, you can “buy down” your interest rate by paying higher fees (also called discount points) when closing your mortgage. Once you have bought down your interest rate, you’ll have a lower monthly mortgage payment. Talk to your loan originator about this option.
Lower your loan-to-value ratio by making a larger down payment
The loan-to-value (LTV) ratio is amount you owe on your mortgage compared to your home’s total value. By putting more money down on a home (to lower your LTV), you can qualify for a lower interest rate. This is because your mortgage lender will carry less risk on your loan.
Improve your credit score
If you have a high credit score when applying for a mortgage, you’ll receive a lower interest rate as banks view you as a lower risk loan candidate. So make a goal to improve your credit rating before applying for your mortgage. The easiest way to improve your credit score is to always pay your bills on time. Check out our video for other tips on raising your credit score.
Shop around
In a period with higher mortgage interest rates, not all mortgage lenders react the same way, so it’s smart to shop around and speak with different lenders. Some mortgage lenders may increase rates out of caution, while others may offer aggressive pricing to gain customers and stay competitive.
Be patient and observe what happens in the economy
While mortgage interest rates have gone up since the election (and are expected to rise in 2017), there is no guarantee. Predictions are often wrong (see the recent presidential election), and you may want to wait out the next few months and observe what happens in the economy before committing to a mortgage.
If you have questions on securing a low interest rate in a period of economic volatility, contact me today!

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