When buying a home for your family, you want to secure the right mortgage rate. Depending on your credit history and income, you might have to fight a bit harder. However, if you prepare yourself well and use these tips, you can increase your odds of getting a great mortgage rate.

Strong Credit Score

Your credit score isn’t something that determines how good of a person you are, but it can definitely help your purchasing abilities. When lenders are deciding whether to approve you for a mortgage, they’re going to take a look at your credit score. Your score doesn’t haven’t to be exemplary for approval. However, a lower credit score often means a higher interest rate. Scores that are lower than 620 are likely to be declined for mortgages. That, or they might require a higher down payment. A strong credit score doesn’t mean you don’t have debt. It means that you pay back the money you borrow in a timely fashion and don’t borrow more than you can afford to return. Get a credit card with a reasonable limit and use it for things like groceries each month, making sure to pay it back right away so you don’t accrue further debt. Your score will look great and make you a prime candidate for an excellent mortgage rate.

High Income

Income is a major determining factor for whether you’ll get approved for a mortgage and how good your rate is. The more you earn, the better your rate will be. You should have steady income verification going at least a few years back. If you’ve seen your income take a hit or have been unemployed for a period of time, it might not be the best moment for you to try to buy a home. You may also need to adjust your expectations if you know it’s unlikely you’ll be approved for your dream home.

Have Debt Under Control

Seeking out a mortgage means you’ll have some debt to take care of, but you shouldn’t be presenting yourself as someone who has a mound of debt already. When determining your mortgage rate, lenders are going to take a look at how the money you owe compares to the money you earn. With things like car payments, credit card debt, and medical bills being common, lenders won’t expect you to be debt-free. You should be able to show them that your debt is something you have under control, based on things like how much you’ve paid off and how timely you are with your payments. Those are things that will also influence your credit score, but the more of a buffer there is between your debt, the better.

Belong to a Bank

If you’re already a member of a bank or a credit union, you immediately have an advantage when it comes to getting a great mortgage rate. These lenders generally offer better deals for people who are already customers, including various discounts. You’ll still need to have things like a good income rate and credit score, but your loyalty will reflect well on you. Additionally, mortgage services can help you with getting a loan based on certain conditions, such as being a veteran.

Have Cash Reserves

A lot of money will be spent when you’re getting a mortgage, but your funds should not be completely depleted. To help with payments and to make yourself look better to lenders, you need to have cash reserves. This is money that you have put aside that can ensure you’ll be able to cover the initial payments, thereby ensuring you won’t be immediately defaulting on your mortgage. If you have a high income and a great credit score, cash reserves aren’t as important. However, cash reserves can really help to assuage concerns lenders have about approving your mortgage application. Having a set amount, such as three months of payment, put aside, tells the lender that you can be trusted to pay back this mortgage. This isn’t anything you have to pay when getting a mortgage. It’s just a way of helping make your case and not make your first few months of homeownership ruined by financial stress.

Having a mortgage is part of being a homeowner that many don’t enjoy. But you can make things better for yourself and your family by getting the right mortgage rate. You’ll be able to save money and also show that you’re willing to stick up for yourself and for your family.

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