The easiest way to get the best interest rate is to compare multiple mortgage lenders and refinancing companies. Some tips for getting a great mortgage deal include improving your credit, making a larger down payment and paying mortgage points:
Compare all mortgage options: As you shop around, get quotes from at least three lenders and be sure to consider all your loan product options — for example, a USDA loan is ideal for someone who lives outside of an urban community, and a jumbo loan is for when you want to borrow an especially high amount. Remember that you can also negotiate with lenders to get better deals. Improve your credit score: To get the best interest rate on your mortgage, you need to have excellent credit. Take the time now to pay off your credit cards, and don’t take out any new loans while you’re getting ready to apply for a home loan. For more, learn about how to find the best credit repair companies. Make a larger down payment: A larger down payment often gets you a lower interest rate. Try to save up for a 20% down payment to avoid having to pay private mortgage insurance (PMI). If you can’t put down 20%, aim for at least 5% — that's where you start seeing a decrease in interest rates. Consider mortgage points: Mortgage points are optional upfront payments that reduce your interest rate. One point typically equals 1% of the loan. When interest rates are high, paying mortgage points can save you money in the long term. Go for the ARM: You can usually get a better upfront mortgage rate by getting an adjustable-rate mortgage (ARM) rather than a fixed-rate mortgage. The most popular type of adjustable-rate mortgage is the 5/1 ARM, which has a fixed rate for the loan's first five years and then can adjust each year after that.