Homeownership is a dream of many people. However, this dream comes with the reality of a monthly mortgage payment, including interest. Keeping mortgage rates manageable will help you remain financially stable after buying a new home. Take a look at how you can lower your home mortgage rate. 

How to Lower Your Home Mortgage Rate

1. Increase Your Down Payment

The standard down payment for a home is usually 20% of the total cost, but, in some cases, you may be able to provide much less than that. However, there are very good arguments for providing as large a down payment as you can manage. The bigger the down payment, the less interest you’ll need to pay. Monthly payments will also be smaller when down payments are more substantial. 

2. Decrease the Loan Term

Many home loans come with a 30-year term. While this provides ample time for you to pay off your loan, it can also greatly increase costs. If possible, consider a shorter term, such as 10 or 15 years. Not only will you have your home paid off much quicker, but you’ll also end up paying a lot less in interest. 

3. Improve Your Credit Score

While there is no quick-fix to a fair or poor credit score, if you’re planning to buy a home sometime in the future, you should take steps to improve your rating now. Your score is based on a number of factors, including the balance on your credit cards and if you’re frequently late with payments. Keep this figure to no more than 30% of the total credit limit, while also making sure you pay your bills on time each month. 

With hundreds of millions of dollars in assets and over 60,000 members across Hawaii, Hawaiian Financial Federal Credit Union is one of the leading financial institutions in the state, with a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad array of services, follow us on Facebook, Twitter, and Instagram for news and updates, or call (808) 832-8700 on Oahu or toll-free at (800) 272-5255 with any questions.