When it comes to finding the best mortgage deals right now in Portland, Medford, Eugene or anywhere else in Oregon, you need to be prepared. How do you know what to expect in a mortgage negotiation? How will you know if you are getting the best deal in the state? It helps to have some solid information in your pocket. So, take a look at a few key tips for finding the best mortgage deals right now in Oregon.
Don’t live in Oregon? You can STILL apply these helpful tips! Take a look!
Tips for Finding the Best Mortgage Deals Right Now
The following is a guest post from Sammamish Mortgage.
Negotiating the best mortgage rates for your new home can be tough. However, you can still find some of the best mortgage deals right now. Here are a few tips that could help you out on your journey.
Tip#1: A Great Credit Score Helps!
Yep, you guessed it, your credit score can be helpful in this area as well. Your credit score can determine:
- acceptance of your mortgage loan
- whether you will be approved
Also, if your credit score is good enough, it can help you negotiate for the best mortgage offers. If you have a strong credit score, dependable income history and can afford a healthy down payment, you are probably a good risk for a lender to take.
As long as your lending criteria can meet or exceed the Lender’s expectations, they should be willing to compete for your business. Well-qualified buyers have many more mortgage offers and options available and they can pick and choose to find the best deal.
How to Maximize Your Credit Score
- Review your credit score and dispute any errors.
- It may sound strange, but errors happen all the time. If you see something on your report that doesn’t make sense, dispute it. The original creditor will then have an opportunity to respond.
- Pay Off (or Down) Revolving Credit Cards to 25% of the Limit
- Keep credit cards with revolving balances below 25%of the credit limit
- Remove Any Collection Accounts
- Review your credit report for any accounts you may have in the collection and seek resolution. Before you pay creditors off, call and ask for a “pay for delete”. Simply paying off a collection account likely won’t improve your score, but getting rid of the account completely will.
- Make Timely Payments on All Utility Bills
- A single late payment can affect your credit score by up to 50 points or more… Ouch! If after reviewing your credit score, you find you need to remove a “late pay” call the original creditor. Be polite, ask for a one-time adjustment, or perhaps they will be willing to negotiate removal if you agree to sign up for automatic payments.
Tip #2: Compare Rates From Several Lenders
Now that you have a firm grasp on your credit score and you know exactly what’s on your report, negotiating the best mortgage deals right now in Oregon is one step closer. The next step is to dig in and do some homework.
It’s time to contact several lenders for rate quotes.
You may be surprised to learn that most people skip this step. In fact, according to a survey conducted by the Consumer Financial Protection Bureau over 40% of home-buyers secure a home mortgage without ever shopping around. This is a staggering statistic when you consider that it could translate into the loss of tens of thousands of dollars over the life of the loan.
Statistics show that mortgage offers can vary from lender to lender by as much as a half a percent or more. As an example, the CFPB tells us if you were to secure a $200,000 30-year fixed mortgage at 4.5% instead of 4%…
You could expect to pay:
- around $60 more per month, or
- a whopping $3,600 in the first five years and $21,000 over the life of the loan.
Many people may skip shopping for a home loan because they fear it will harm their credit report. Not true, while a hard credit pull can affect your score, credit reporting agencies treat hard credit pulls as a single event when shopping for a home mortgage. So how many rates are enough to compare? A simple approach would have you compare at least 4 separate mortgage offers, but you can compare as many as you feel comfortable with.
Tip #3: Use Lender Quotes as a Negotiation Tool
Now that you are armed with rate quotes, it’s time to use them as a negotiation tool. There are at least a couple of different ways to approach this step. Rate quotes are not set in stone, and many times come with added fees to increase commissions.
- One approach is to simply show the best rate to different lenders and give them the opportunity to beat it.
- Another approach would be to take the rate back to the original lender and ask them to adjust based on the other quotes.
Approaching the lender with more competitive offers may be the single best way to see significant savings in your mortgage rate as well as closing costs.
Tip #4: Use Discount Points As a Negotiation Tool
If you want to negotiate the best mortgage offer, one effective method is to focus on discount points.
What are discount points?
Discount points are something lenders offer as an option in effect to pre-pay the interest on the mortgage upfront. However, just because you are purchasing discount points doesn’t mean you will have to pay for them upfront.
In some cases, the lender may be able to build the discount points and other closing costs into the balance of the loan. Each discount point lowers the overall interest rate by a fraction of a percentage point over the lifetime of the loan and is usually purchased for about 1% of the total purchase price. For example, If I purchased a home for $200,000, discount points would cost about $2,000 each.
Tip #5: Consider Your Options
When it’s all said and done, a simple way to negotiate a better mortgage offer may be as easy as choosing the right kind of loan.
Government-backed loans offer the lender more security which means they usually offer a more competitive rate. There are expectations that must be met regardless of the loan program you choose, but it pays to understand FHA and other government-sponsored loan programs.
Sammamish Mortgage: A Quality Mortgage Option
Do you have more questions about negotiating the best mortgage deals right now in an Oregon home purchase? Let the mortgage professionals at Sammamish Mortgage guide you. Family-owned and operated for more than 20 years, they know what you value. Let them help you understand the ins and outs of home financing and more.
Sammamish Mortgage offers a variety of mortgage loan programs including FHA and VA mortgages. Regardless of your situation, they can guide you through the process.
If you have questions about securing a home mortgage in Oregon, or would like a free rate quote, contact their friendly staff. They look forward to serving you!
AUTHOR LaTia Longuemire
My name is LaTia Longuemire. I enjoy writing, singing, and cooking in my spare time. My passion is helping others. At this stage in my lifetime, I'm primarily focused on my children. They are everything that keeps my world spinning.