Without knowing it, many people develop something akin to a split personality when it comes to buying a home. In the beginning, as they pursue their ideal greater Seattle house, they automatically assume an unabashedly active role. Nobody has to tell them that they’re the boss in the process—since they are the customer, they correctly expect to be in total command of the house hunting process. They develop their unique wish list and ultimately decide which property best satisfies it.
But then a split can develop. The active, in-charge commander often does an about-face when it comes to the nuts and bolts of the next step: securing the lowest Seattle area mortgage rate. Upon entering the realm of what seems to be a monolithic and largely inscrutable home loan industry, the formerly active, energetic house hunter turns passive, hoping for approval with fingers crossed.
To some degree, that’s not an unreasonable stance, since home loan terms are based on hard numbers already set in stone: income and expense records, payment histories, and credit score numbers. But in truth, the best way to secure the lowest mortgage rate for a new Seattle area home loan is to start early and actively to create the scenario you’re hoping for. Here are six ways to make it happen:
1. First, as soon as possible and well before any house hunting begins, check for errors in your credit report. They can and should be corrected, but since the process can take months, here’s where being proactive early pays off.
2. Stay on top of those credit accounts. Continue to use credit cards, but keep the balances below 30% of their maximum (better yet: below 20%).
3. As you approach application time, keep your documents and reports up-to-date. Quick responses to document requests speed the process, and having everything at hand makes your part of the work much easier.
4. Watch the market. Rates change frequently, and keeping an eye on their movement from week to week will build your confidence in being able to recognize an opportune moment to tap the lowest mortgage rates.
5. Be wary of loans advertised as “no-cost.” The Brooklyn Bridge is not for sale, either: loans cost something to develop, and those costs will always be paid by the borrower. The bottom line lowest mortgage rates are best represented by the APR percentage, which summarizes the total cost, including fees, in a single number.
6. Be prepared to shop. Whether you tap a savvy area mortgage broker for help or go it alone, tracking down the lowest mortgage rates in Seattle is doable. The home loan industry really isn’t as monolithic as it might seem.
There shouldn’t be a split between actively seeking your dream house—then merely passively hoping for favorable loan terms to come your way. Starting early is one key—and teaming with an experienced real estate professional is the other.