|5 Tips You Need For Getting the Lowest Mortgage Loan Interest Rates|
Every borrower applying for a loan wishes to get the best interest rates. However, lenders reserve the best rates for people whose borrowing power is higher. On the face of it, a change of a few percentage points might not seem like much. However, when it comes to real money, even a .10% reduction in the interest rate can mean savings worth thousands of rupees through the loan term, which can be as high as twenty years.This article is a lit of the best tips to increase your borrowing power and get the best mortgage loan rates.
Borrowers often overlook the need to keep their credit score high. Even a single instance of delay in repayment can impact your credit score negatively. Hence, before applying for a mortgage loan, you must use the mortgage loan EMI calculator and choose a loan amount you can repay without much hassle. Also, try not to increase your debt level beyond 40% of your net monthly income. Lenders usually perceive a loan as risky if the borrower is reeling under a huge debt burden.
Another excellent way to get the lowest mortgage loan interest rate is by proving to the lender that your income source is stable. Lenders generally prefer borrowers who have been employed in the same organization for over a year. Additionally, if you hold a responsible position in the organization, your mortgage loan eligibility will be higher. In the case of a business, you need to prove that you are consistently making profits, and the loan EMIs will never be a burden on you.
When you apply for a mortgage loan, lenders usually expect you to make a 20% downpayment. They disburse the remaining amount as the mortgage loan. However, if you want to get the best rates, try paying more than the required amount. Generally, lenders want you to make a downpayment as it reduces the possibility of loan default. By increasing the downpayment amount, you can show the lender that you are a serious and careful borrower. The lender is likely to go the extra mile and offer you the best interest rates in this case. Remember to use a mortgage loan EMI calculator to see the impact of a higher downpayment on your EMIs.
Lenders like to approve a mortgage loan with the best rate to borrowers with healthy cash reserves. If your savings account balance is sufficient to take care of six months' EMIs, stay assured that the lender will hold you in high esteem and offer the lowest rates. To prove that you have a decent balance in the account, attach your bank statement along with the documents required for a mortgage loan.
Mortgage loan interest rates can be floating or fixed. If you are unsure whether the interest rates would go up or come down, it is better to opt for a fixed interest rate. However, if you are certain that the interest rates will only decline further, go for the floating rate. Generally, the fixed rate is 1-2% higher than the floating rate, at the time of loan application. You can make use of the mortgage loan EMI calculator to calculate your actual savings.
Mortgage loan interest rates depend on various factors, and borrowers with a healthy credit score generally get the lowest rates. Hence, while keeping the tips mentioned above in mind will certainly increase your chances of getting lower interest rates, always keep your credit score your top priority.