5 Ways To Keep Your Mortgage Rates Affordable

If you're on the market for a new home here are five tips that will help you obtain the low mortgage rates that you always see on television. One thing you can do to improve your chances is to pay your bills when you get them. Lenders want to know that you are going to make your payments on time month after month.

If your credit history shows that you have a habit of being late or missing payments then you will be considered a bigger risk.

Also making a larger down payment will increase your chances for lower mortgage rates. Lenders have learned that the more money you put down on a house, the less likely it is that you will default. Pay off as much debt as you can. Lenders want to see that you can afford to make all of your current payments and also the new mortgage payment they will put on top of it.

The biggest and most important is to purchase a house that you can truly afford. The rule of thumb is that you should not spend more than about 30% of your income on a house payment. Many lenders will stretch that to 40% or more depending on the rest of your debt. One thing to keep in mind is that the more you borrow and the closer you come to absolute limit of your ability to keep up with your payments, the higher your risk and the higher the rate you will be quoted.

Finally, you should shop around. Get realistic quotes from at least three lenders. If you do these things you should have no problem getting rates you can afford and keeping your house payment under control.