How Can I Qualify for a Good 30 Year Fixed Mortgage Rate?

For most people, buying a home is the single largest purchase they’ll ever make. It’s worth it to get the best 30-year mortgage interest rate you can. Just one more percentage point of interest and you will pay thousands of dollars more for your home over the course of a 30-year mortgage. A 30-year mortgage includes 360 monthly payments. If you can save $200 per month by getting a lower interest rate, this equals $72,000. A quick visit to an investment calendar can show you how much money you’d have if you’d saved $200 a month for 30 years and invested it: at an average 6% rate of return, you’d have an investment fund of over $196,000. 

So, what can you do to qualify for a good 30-year fixed mortgage rate?

Improve your FICO credit score

Keep your credit score as high as possible. Pay your bills on time and don’t keep more than 20% to 30% balances on your credit cards. Ideally, you should be able to pay your credit cards off every month. Check your credit report regularly. Make sure you have no derogatory reports like collection accounts or liens. Don’t make major credit purchases like a new car or appliances before you pre-qualify for a mortgage. 

Save as much as possible for a down payment

Conventional mortgages often require a 20% down payment. We get it: it’s challenging to save a 20% down payment on a $750,000 home. You can have options for other loan programs like FHA and VA home loans that don’t require such a large down payment.

Have a strong record of earnings and employment

These days, more people are working independently or combine self-employment with traditional salaried jobs. Be sure you can document at least two years or more of steady earnings at the level you need to qualify for the mortgage you want.

Shop multiple lenders

You’ll get different answers from different lenders on interest rates and loan terms. That’s one reason working with an experienced independent mortgage broker who is a loan professional can help you get the best deal on your 30 year fixed mortgage.  That SINGLE INDEPENDENT MORTGAGE BROKER can SHOP dozens or hundreds of with a LENDERS on your behalf with a SINGLE LOAN APPLICATION. And with a SINGLE CREDIT PULL. This is a huge benefit of working with an independent mortgage broker, they only have to run your credit ONCE and can instantly compare rates and shop your loan with dozens if not more lenders finding you the best rates and lowest costs.  Whereas, a consumer went to dozens of lenders to shop the rates, each lender would need a complete application and would have to run the consumers credit in order to accurately quote a rate. Since rates are a factor of much more than just a FICO Score, and the LTV, Loan to Value of a property. Pricing models take into account DTI debt to income, and debt to available credit ratios along with many other factors that can only be accurately priced with a complete application and a tri-merge mortgage credit report.

So that’s why an independent mortgage broker who has your complete loan application and has run your credit can accurately compare and shop rates on your behalf with multiple lenders simultaneously.  Without having each of them re-running your credit. Since through the wholesale channel a broker can just re-issue the same credit report to as many lenders in their channel without any additional hard hit inquiries on the consumers credit.

Now once you have the best mortgage rate and know your loan terms, consider locking in your loan rate while you’re in the closing process. This is a service many lenders offer for free, as well as for a modest one-time cost for those wishing to buy down to an even lower rate.

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