Buying a home in Salt Lake City is a good investment. Although mortgage rates are rising slightly, Salt Lake City is one of the most popular sites for homebuyers in Utah, mostly because it is the center of the Mormon faith. Investment or not, you should still get the best mortgage rate you can, says AltiusMortgage.com. Here are some ideas on how to navigate your way around mortgage options successfully.
Pay for Points
Mortgage rates will not be much different from lender to lender, although some will offer special rates for specific mortgage bundles. Whatever lender or mortgage type you choose, your rate will always improve if you pay for discount points. Points are equal to 1% of the mortgage, and you are essentially paying the interest in advance. The more points you pay in advance, the lower your interest rate.
Pay a Higher Down Payment
You should aim for a minimum of 20% down payment to avoid having to pay for mortgage insurance. You also get a lower mortgage rate when you give a higher down payment. This is because lenders have a lower risk. Since your monthly payments are smaller, you can opt for shorter terms. In addition, a higher down payment means you have more equity in your home. If you can afford it, a high down payment puts you in a win-win situation.
Pay Down Your Principal
When your lender gives you a schedule of payments, you should know that your payment for the first few years is mostly for the interest, which depends on the principal. Ask your lender for a prepayment scheme where you have the option to pay a part of your principal every year to shrink what you pay in interest.
Pay Over a Shorter Term
The best way to lower your mortgage rate is to opt for a shorter term. You can definitely get better rates for a 15-year fixed rate loan than for a 30-year one. Just make sure that you can afford the monthly payments before you do.
If you choose the right mortgage company, you can get the best mortgage rate in Salt Lake City. But, there is more than one way to skin a cat. The above tips can help you get even better rates.