May 20, 2021 11:23 AM EDT

4 Ways to Get a Better Deal on Your Mortgage

4 Ways to Get a Better Deal on Your Mortgage

(Photo : 4 Ways to Get a Better Deal on Your Mortgage)

Getting a good deal on your mortgage can save you literally tens of thousands of dollars, so it makes sense to try to secure the best possible package.

There are a few tactics and strategies to use in order to improve your mortgage prospects, so here are just a few of the best routes to take.

Find the best mortgage rate

The higher the rate of interest on your mortgage, the more you will be repaying each month and the greater the total repayment amount will be over the lifetime of the loan.

As such it is best to check mortgage rates today and pinpoint the most appealing, affordable options from mainstream lenders.

While the rates offered to you will vary depending on your circumstances, it is worth noting that rates are universally lower than ever before at the moment, so if you are still relying on an older mortgage deal, now is a great time to make the switch.

Check your credit score & take action to improve it

As mentioned, even if a better rate of interest is offered by a prospective lender, you may not be able to secure a more favorable mortgage deal unless you are in a solid financial position yourself.

Furthermore if you apply to move your existing mortgage or to secure a new one and your application is rejected, this will do more damage to your credit rating.

Because of this, it is sensible to always keep a close eye on your credit report, look into the factors that are holding you back from making improvements, and also identify any inaccuracies so that your score can ideally rise, unlocking more attractive mortgage packages as a result.

A whole host of elements may be preventing you from improving your credit score, such as failing to make payments on credit cards on time, or accumulating a lot of debt. It is often necessary to pay down your existing debt as much as possible before seeking a mortgage, not only to improve your chances of approval, but also so you can benefit from lower rates and repayments.

See if your current lender is willing to be flexible

While you may usually be able to get a better deal on your mortgage by moving over to a different lender altogether, if you already have a package set up with a particular financial institution, then you could negotiate a more favorable rate without needing to go through the hassle of switching.

Of course the first step to actually achieving this is knowing what other deals are out there, so do your homework and scout out the top options from rival lenders so that when you get in touch with yours, you will be in a position to provide evidence of what else is out there on the market.

Not every lender will be willing to work hard to keep you as a customer, but some will certainly offer to match a mortgage deal from one of their competitors just to keep you onboard and maintain your loyalty.

Ask for a rate lock

Last of all, if you do find the mortgage deal of your dreams, see if you can lock the rate in for as long as possible.

Because of the record low rates at the moment, this is an especially good strategy to save you money over time, so while a variable rate deal may be better if rates drop even lower, the likelihood is that a rate-locked package will actually be in your best interest going forward.

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