Having a lower mortgage interest rate in Austin helps with every part of your life. When you’re paying less money every month for your home, you have more money to spend on other things, or you can afford to buy a bigger home or spread the payments over fewer months.
The best way to get yourself a lower mortgage interest rate in Austin is to raise your credit score. Your credit score is the basic building block of how mortgage companies build your rate, and helps inform us on what kind of a risk you are to lend money to.
Raising your credit score isn’t something that happens overnight, though. It takes real work to get that lower mortgage interest rate in Austin, but it’s worth it. Even lowering your interest rate a half-point can make a huge difference in what you pay each month, and over the course of your loan. Just as an example, the difference between 3.5% and 4% on a $200,000 loan will save you $20,427 over the course of a 30-year mortgage.
Before you get deep into mortgage shopping, it’s a good move to check your credit score in order to know what you’re working with. You can check in with the three major credit reporting agencies (Equifax, TransUnion, and Experian) and pull your credit. You can then start to work on issues that have popped up on your report and fix them before you apply for your mortgage.
What Credit Score Should You Shoot For
The FICO (Fair Isaac Corp.) score is the best barometer for your credit score. It gives you a grade from 300-850, with the higher scores showing that you are a worthy risk for lenders to take. If the score is over 800, that’s an exceptional score and you should qualify for the lowest rates around. In the 740 to 799 range is very good, from 670 to 739 is considered good, 580 to 669 is fair, and anything below that is poor.
Every lender will determine their own credit score limit, but even a few points can make the difference between being approved or not or getting a lower mortgage interest rate. You can save on your monthly payments just by fixing your credit!
Can I get a mortgage with a low credit score?
Sure, you can, but you’re going to pay a much higher interest rate than you would if you waited until you got your score to a higher threshold. You’ll pay more in interest, and have higher monthly payments. It’s also possible that you may have issues with borrowing in other areas, like getting a new car or credit card if you have lower credit.
Different loan types also have different credit requirements.
Conventional loans: You can get a conventional loan with a mortgage interest rate as low as 620, but there will be higher other requirements, including higher income and lower debt-to-income ratios.
FHA loans: The Federal Housing Administration will guarantee loans to borrowers with lower credit. You can qualify for an FHA loan with a credit score of 500 to 579 with a 10 percent down payment. Borrowers with a score of 580 or higher must put down at least 3.5 percent.
VA loans: The U.S. Department of Veterans Affairs backs VA loans. They are offered to active and veteran military personnel and their families, and are supplied by the Hero.Loan program. While the government does not have a minimum credit score to qualify for a VA loan, many lenders require a minimum score of 620.
Tips to boost your credit score
If you want to boost your credit score to get that lower mortgage interest rate, you have ways to do it. Don’t settle for the higher rates that you’re currently being offered, work on these steps:
These fixes won’t improve your credit score overnight, but they are well worth the time to make sure that you can get a higher credit score and a lower mortgage interest rate on your loan. Discipline and saving will help you buy a house with the lowest interest rate available and save you money.
Call the best mortgage lender in Texas, John Schutze’s Texas Loan Experts Team in Austin at (512) 775-6820 or visit JohnSchutze.com to apply now. Texas Loan Experts has the lowest rates on Conventional, FHA, Mortgage Refinances, Jumbo Loans, Debt Consolidation Loans, Rate and Term Refinances, Cash Out Refinances, and HARP Loans. We are also the exclusive home for Hero.Loan VA Mortgages and The Bank Statement Mortgage. We will come to you to close your loan. Nobody gets lower mortgage rates on better loans than Texas Loan Experts.
Our customer first approach to mortgages is what separates us from all of the other banks and mortgage companies. Our team will walk you through the process to ensure that your loan closes in a very timely manner. Our competition may think our philosophy on face-to-face customer service is excessive but our clients sure do appreciate it.
WE ARE THE EXPERTS
Our team has set the standard in the mortgage industry. We hire only the best in the business. Our knowledge and experience is unmatched. We continue to train and study new mortgage loan programs to make us the best choice for mortgage refinancing and home purchases, debt consolidation, Conventional, FHA, HARP, VA, and Jumbo Loans available.
BETTER HOME LOANS WITH LOWER MORTGAGE RATES
We provide you with several different mortgage loan options to ensure that you find the mortgage loan program that best fits your needs. Because of the volume of mortgage loans our team closes and the great relationships we have forged within our industry, we’re able to offer the most competitive mortgage interest rates to our clients.
WE ARE MORTGAGE LENDERS, NOT MORTGAGE BROKERS
As a direct mortgage lender, our process has been streamlined from start to finish. Having the entire mortgage loan process contained under one roof allows us to quickly and efficiently close your loan. Our ability to use the newest mortgage loan products and underwrite our own files, allows us to approve loans that our competitors can’t.