4 Tips to Get the Best Rates in a Mortgage Loan Application

Most Americans buy a home with a mortgage as most don’t have enough cash to pay the full price. Whether you’re a first-time homebuyer, wanting to make improvements, or investing in a rental property, your next mortgage can turn your goals into reality.

The key to getting a good mortgage also lies in the interest rates. If you want to get the best deal you can out of a mortgage, here are some things you can do:

1. Save Up for a Down Payment

Putting more money for a down payment can help you get a lower interest rate in your mortgage, especially if you have enough liquid cash for a fifth of the down payment. Lenders will surely accept a lesser amount, but paying lower than a fifth of the initial down payment means you’ll need to pay private mortgage insurance.

That means an additional 0.05 to 1 percent on top of your original loan amount annually. So the sooner you can pay more than a fifth of your home’s total value, the sooner you can end mortgage insurance.

2. Improve Your Credit Score

A higher credit score gives you better chances of getting the lowest possible rate. That is always one of the most important factors that lenders consider when approving a mortgage loan, and so build your credit score if you can.

Your credit score is a reflection of your ability to make repayments on time. And when you can prove that, your lender can give you a low interest rate. Improve your score by paying bills on time and eliminating credit card balances. If you can’t pay the total amount, ensure that it’s enough that your carried balance is only 20 percent of your available limit. 

Moreover, you also want to regularly check your credit score and spot for mistakes on your report, if any. Any errors should be cleaned up before you apply for a mortgage.

3. Build an Employment Record

You’ll more likely get the best mortgage rates if you have steady employment and income source for two years. If it’s with the same employer, it’s better. Also, prepare to show your W-2s from the past 2 years and pay stubs from the last 30 days. Proof of commissions and bonuses earned are also helpful. 

It can get harder to get approved if you’re self-employed or your income source comes from multiple part-time jobs. Self-employment status also requires additional documents to submit to ensure you get approved. 

4. Get a 15-Year Fixed-Rate Mortgage Loan

One of the most common mortgage types is a 30-year fixed rate, but you might want to consider a 15-year fixed-rate mortgage instead. If you found your long-term home and have a good income source, you’d want to pay off your mortgage quicker. 


Getting approved for a mortgage loan can be tough and even more challenging to get the lowest interest rate. But there are ways you can tip the scale to your favor. Follow the suggestions above and buy your dream home! 

Sam Lends Money helps borrowers in Central California purchase the homes of their dreams. As loan officers who are veterans in the mortgage and real estate industry, we understand how challenging a mortgage loan can be. 

Whether you’re a first-time homebuyer, a property investor, a foreign national, or self-employed, we can help you get the best mortgage possible. Get pre-approved for a mortgage with Sam Lends Money today!