When shopping for a home loan, the feature which many homebuyers tend to look at first is the interest rate.
While this is just one aspect of the cost of a mortgage, it is definitely among the most important. Getting a loan with a competitive interest rate can save you thousands of dollars.
How can you find the lowest Seattle mortgage rates, or the most affordable mortgage rates in Washington state? Following are some suggestions.
1. Raise your credit score and improve other financial metrics.
Getting a low mortgage rate starts with your risk profile as a borrower. To assess your risk profile, lenders consider financial metrics such as your credit score and your debt-to-income (DTI) ratio.
If you have the time, you can work on improving these metrics before you apply. If you need some guidance on what you can do to boost your credit score, here are some tips to get you started. Paying down debt or making new large purchases may lower your credit score for a few months so consult with your mortgage broker before making any debt and credit changes.
As for improving your DTI, there may not be much you can do regarding income, but you might be able to reduce your debts. See if there are some you can pay off, or if there is a way to reduce your regular expenses. Always ask your mortgage broker if you plan to pay off debt to make sure it will not negatively affect your loan application or approval.
2. Demonstrate cash reserves.
Another way you can show lenders that you can take on a mortgage is by proving you have some cash reserves ready and waiting should something (like your job) fall through.
Aim for a minimum of six months of cash reserves. Have a year or more? That is even better.
3. Prove at least two years of steady employment.
Another factor which impacts your risk profile—and the mortgage rates you qualify for—is your employment history.
Lenders want to see that you have been employed for at least the past two consecutive years with no gaps. They also do not want to see a drop in pay over that timeframe.
If you have been employed for longer than two years, and/or have had a pay raise, that is something you will want to document.
What if you are self-employed, or you have an unusual income situation? You will want to choose a Seattle mortgage broker which allows you to apply for a stated income loan.
This type of loan features an application process where you get to state how much income you make without furnishing a W-2.
Self-employment income is sufficient to qualify for a great loan with an affordable rate—so long as you are working with a broker that understands your situation.
4. Be willing to put a larger down payment on a home.
Are you able to afford to put more than the minimum down on a new home? Then you should think about doing just that.
When you pay more of the cost of a home upfront, that makes it less risky for the lender to loan you the rest of the money.
With that reduced risk comes more affordable rates.
5. Comparison shop.
There are many mortgage lenders in Washington state, and some of them offer lower rates than others.
If you just pick the first lender you contact, you will have no idea whether you are getting the most competitive rates or not.
That is why it is important to get quotes from multiple lenders. Mortgage rates do change daily so when you do request competitive quotes provided each mortgage broker with the same information so all your estimates are apples to apples. You can certainly change your rate and loan amount after you receive initial estimates so settling on a rate initially is not necessary. Some of the criteria that will affect your rates and fees are your home value or purchase price, loan amount, down payment, credit score, rate lock and type of home.
6. Better yet, work with a competitive mortgage broker in Washington.
Trying to get all those mortgage quotes on your own can be very tedious and time-consuming.
You want to be spending that time shopping for your new home, not searching high and low for the most affordable mortgage rates.
That is where a well-networked mortgage company in Washington can help you out.
A direct lender can only offer you quotes for their specific selection of home loans, but a broker can bring you quotes from numerous lenders throughout the state.
Not only that, but a quality mortgage broker has carefully screened all the lenders it chooses to work with, partnering only with those which are licensed, reliable, and affordable.
Those lenders are sometimes even willing to extend special discounted rate and closing cost offers to customers that the broker refers.
Blue Square Mortgage Brings Affordable Mortgage Rates in Seattle & Throughout the State of Washington
If you are tired of searching for the lowest mortgage rates in Seattle or elsewhere in Washington, let us do the legwork for you.
We specialize in helping homebuyers find home loans with low rates and fees, and offer a wide variety of loan products through our lending network.
You can schedule a consultation today by calling (206) 352-6453. We look forward to working with you!