Ask for a lower interest rate
One way you could potentially get a lower interest rate is just by asking for one. This might sound like a crazy plan, but trying it has essentially zero costs, and one blogger did lower their mortgage payments just by asking. While this approach is possible, we recommend you keep your expectations low if you try this.
If you want to give the “just ask” route a try, though, make sure your lender has a reason to say yes. Get your credit score in order, show a consistent work history, and demonstrate that you’re a safe bet. One small and sometimes overlooked strategy is to set up automatic monthly payments. This ensures you’ll never be late on a payment, and that makes you seem all the more reliable. The more you can make yourself look like a sure bet, the more likely lenders are to give you a lower interest rate.
Prepay your mortgage
If you want to pay less total interest (and finish paying off your home quicker than you normally would), consider prepaying your mortgage by paying off more than you’re required to each month. Prepayment won’t lower your interest rate per se, but it will lower the total amount of interest you pay over the course of your mortgage, which accomplishes essentially the same goal. One thing to watch out for, though, is that some mortgages include penalties for paying off your loan early. Make sure your loan doesn’t include a penalty if you decide to pay it off quicker than you need to.
In the end, the best way to get a lower interest rate is to go ahead and refinance your mortgage. Work on improving your financial situation and increasing the value of your home. If you want to lower your monthly payments even more, get rid of expenses like private mortgage insurance. Watch the market, make sure the time is right, and trust advisors who can steer you in the right direction. When the time finally comes to refinance, work with a lender who will lock in a lower interest rate for you so you can save thousands of dollars over the life of your mortgage. Refinancing isn’t easy, but it’s often worth it.
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