There’s good news for home buyers: 30-year fixed-mortgage rates seem to be doing the limbo these days. How low can they really go? According to a recent Bankrate survey, they’ve dipped down to 4.28 percent. The 15-year fixed mortgage rate is even lower, scraping the ground at an astounding 3.39 percent. How can you get in on this real estate free-for-all?

Follow these tips for securing the lowest possible mortgage rate.

Polish Your Credit Score

Your credit score is based largely on your outstanding balances (generally 30 percent) and payment history (generally 35 percent). FICO reserves the right to change these percentages based on your credit history, but you do have some control over what a creditor sees when you apply for a loan.

The best thing you can do to polish your credit rating is to establish a healthy track record. The longer you’ve been paying bills on time and avoiding collections, the better. If you can’t pay a balance off completely, dissolve as much of the debt as you can. A good rule of thumb is that your outstanding balance should equal less than one-third of your credit limit.

Flex Your Bargaining Muscle

Shopping for a lender can have you reaching for the Tylenol, but don’t settle for the first rate you’re offered. Lenders are still trying to recoup the losses they’ve incurred over the past seven years, and the competition for new mortgages is fierce. Ask a number of candidates to give you a good faith estimate of closing costs, then compare the figures and make your choice.

Once you decide which lender you’d like to work with, negotiate every dollar you can – it all adds up in the long run.

Certain bank fees are non-negotiable, like the appraisal and credit report. Other amounts, like your application and processing fees, could be argued down. Going with a non-escrow plan also saves you cash up front, though you’ll still eventually have to pay those taxes.

Play the Rate Lock Game

Interest rates fluctuate throughout the day, so no matter when you lock in your rate, you’re taking a gamble. Don’t take a blind risk; take a calculated one.

You can choose a 90, 60, or 30-day rate lock. The longer you lock your rate, the higher it’ll be. On the flip side, the longer you lock your rate, the more time you’ll have to get your affairs in order and find the perfect home. Base this decision on personal circumstances such as where you’re living now and whether you’ve already found your house. No matter what you do, be sure to ask for a “float down” stipulation so that if rates fall during the locked period, you’ll get the lowest rate.

The road to real estate ownership can be a bumpy one, but the mortgage process will be a lot smoother if you find a lender you can live with. The fluctuating housing market taunts potential buyers with its uncertainty, but one thing remains constant: You have some control over the mortgage rate you end up with, and you should make every effort to seize that control.


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