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Whether you’re getting a first mortgage or trying to secure a refinancing loan to make your payments more affordable, there are some important strategies for finding the right home loan rate for your needs. Below are some tips.

Tip #1: Visit Several Lenders

Contrary to common belief, you do not need to ask for home loan rates for only a single lender. There’s nothing wrong with shopping around so you can get a comprehensive idea of what’s available for you. The other good news is that with chances in the way credit scores are calculated, you won’t be penalized if several lenders hit your report around the same time. That means there should be nothing stopping you from shopping around Canberra.

When you do start searching for home loan rates from other vendors, be sure to ask about fees associated with the mortgage. In some cases, the lowest home loan rate can only be obtained if you pay costly fees upfront.

Tip #2: Work on Improving Credit Report

A low credit score is going to end up costing you more in terms of your home loan rate. That’s particularly true in today’s tougher economic time. The credit crunch has meant that even if you have some minor problems of your report, you could end up paying several percentage points more in interest rates, as well as other types of fees not changed to people with the highest credit scores.

The good news is you can often improve your credit report without much effort. For example, if you owe quite a bit on your credit cards, pay them down to between 25 and 50% of the total balance. You don’t even have to pay them off! If you have any small personal loans, consider paying them off before you start shopping around for your home loan rate. After all, the less debt you have the better. Just remember to keep some of the longstanding debt to show the length of your credit history.

Tip #3: Save Up for a Down Payment

Today, most lenders are going to expect you to pay a down payment for the home you want. The amount of that down payment is usually 20% of the total home cost. If you can’t swing that amount, you’ll be required to purchase PMI (private mortgage insurance) which is a lot higher but does offer some protection to the lender in case you default.

Saving up for the down payment is a good way to get the best home loan rate possible. For one, you’ll be less likely to be rejected but you’ll have a smaller principal amount as well. Now if you don’t have the down payment, you do have other options. The main option is to have an FHA loan which requires less and sometimes no down payment because the federal government guarantees the loan for you. However, you will need to meet specific requirements in order to qualify for one of these loans.